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From the collection of the 

z n m 

o Prelinger 

v Jjlbrary 

San Francisco, California 


















For his invaluable assistance in the 

preparation of this book the author 

acknowledges his indebtedness to 

Charles W. Wood 


I HAVE long entertained a profound regard for Edward 
A. Filene's insight and foresight. This regard was awak- 
ened by three years of professional association with him when 
I saw his mind at work in office hours and after. And this 
regard has grown greatly in the dozen years since we were 
together as colleagues. 

There has always been a touch of the prophet about him. 
And the prophetic mind is always a bit baffling alike to the 
pure theorist and to the pure practicalist. I have seen prac- 
tical executives accuse him of being theoretical, and I have 
seen theoretical enthusiasts grow impatient with his insistent 
practicality. The peculiar strength of his mind lies in its 
effective correlation of theory and fact. He is a living exam- 
ple of the contention that comes back to me from a treatise 
by E. S. Brightman to the effect that "to be truly practical 
one must take into account all that any theory could reason- 
ably conceive" and that "to be truly theoretical one must 
include every practical fact." 

Until one comes to sense and see the working of his mind, 
his wrestling with ideas and issues seems disorderly, inco- 
herent, and inarticulate. During my first year of association 
with him, I thought he wasted much valuable time, when 
problems were up for analysis, by exploring one futile and 
fruitless by-path after another. I soon discovered that every 
once in a while a by-path that seemed so clearly not worth 
exploring led straight into the road to the realization of our 
objective. I soon discovered that he has applied to socio- 
economic thinking the method of the good diagnostician who 
insists on following up every symptom, however irrelevant it 
may seem, and by eliminating one possibility after another 
finally tracks the disease to its source. His mind is disorderly, 



if you will, but it is the living disorder of growth. It is easy 
to display an air of efficient orderliness if one's mind stays 
always in the smooth grooves of the accepted formulas. But 
the Filene mind assumes every formula guilty until proved 

He comes as near to being the philosopher of our machine 
economy as we have yet produced. More than any other 
American, and before any other American, he foresaw and 
formulated the social significance of mass production and 
mass distribution, if and when these processes are subjected 
to statesmanlike direction. We need his sanity and his seer- 
ship respecting the machine economy just now, for, with an 
undue continuance of the world-wide depression, men will 
be powerfully tempted to rebel against the machine economy, 
as if it were to blame for their troubles, whereas their trou- 
bles have come upon them, not because the machine economy 
has been developed, but because the machine economy 
has not been fully met by a new business statesmanship that 
sees it for the instrument of economic stabilization and social 
enrichment that it is. Men are everywhere blaming the ma- 
chine order for sins that lie rather at the door of the economic 

I confess I was a bit taken back when the publishers in- 
formed me that Edward A. Filene had written a book on 
Successful Living. Can it be possible, I asked myself, that 
Edward A. Filene has written another self-made-business- 
man-success story! I should have known better. He has not. 
He has written instead an astute and illuminating volume 
on the problem of adjusting ourselves effectively to life under 
the machine economy. There has been so much bunk and 
balderdash written about the impossibility of the human 
spirit's keeping alive in a machine age that this book comes 
like a breath of clean and antiseptic air through a stuffy 







4. CREDIT 39 






1O. THE TARIFF 1 * 1 
I 1 . WORLD PEACE l 34 

12. EDUCATION *44 

13. RELIGION 1 5& 



15. BEAUTY 1 9 






19. HEALTH 222 

20. HOUSING 230 





Mass Production is not simply large-scale production. It is 
large-scale production based upon a clear understanding that 
increased production demands increased buying, and that 
the greatest total profits can be obtained only if the masses 
can and do enjoy a higher and ever higher standard of living. 
For selfish business reasons, therefore, genuine mass produc- 
tion industries must make prices lower and lower and wages 
higher and higher, while constantly shortening the workday 
and bringing to the masses not only more money but more 
time in which to use and enjoy the ever-increasing volume 
of industrial products. Mass Production, therefore, is pro- 
duction for the masses. It changes the whole social order. It 
necessitates the abandonment of all class thinking, and the 
substitution of fact-finding for tradition, not only by business 
men but by all who wish to live successfully in the Machine 
Age. But it is not standardizing human life. It is liberating 
the masses, rather, from the struggle for mere existence and 
enabling them, for the first time in human history, to give 
their attention to more distinctly human problems. 



EVERYBODY wants to be successful. Everybody is trying 
to be successful. Even the beggar who has quit work- 
ing, on the theory that the world owes him a living, is gen- 
erally doing his level best to collect it. Even the smart young 
cynics of our new literary set, who are engaged in satirizing 
our struggle for success, are trying to satirize it successfully. 

Actually it is not success, but some of the ancient formulas 
of success, to which this generation takes exception. 

I can not, for instance, proclaim from my shopkeeper's 
tower that success is the inevitable fruit of industry, honesty 
and thrift. I know that industry, honesty and thrift are neces- 
sary virtues, but I shall be reminded that millions of the 
most industrious, honest and thrifty people of earth recently 
starved to death in China. 

Nor can I claim that "stick-to-itiveness" will bring suc- 
cess. One might stick to his job like a fly to a piece of fly- 
paper and be no more successful than the fly. 

"Hitch your wagon to a star" may be good poetry, but it 
may be very bad advice. What kind of wagon? And what 
kind of star? A very good milk wagon may be entirely 
unsuited to traffic on the Milky Way. 

Human nature being what it is, however, we must always 
be trying to find out how to live humanly. The lower ani- 
mals may be born with instincts which tell them how to 
fulfill their animal destinies. But human beings are not so 
equipped. It is necessary for each generation to find its for- 
mulas for successful living, even if it is necessary for suc- 
ceeding generations to tear those formulas up. 

Evolution is not opposed to formulas; it is simply the 



process by which formulas are outgrown. Good formulas, 
like good eggs, can not be kept too long. 

The simple fact is that we have come into a new world, 
and the charts of the world we used to live in no longer 
serve our need. A new human society is being born. There 
are no new laws; but the law of Nature is the law of change, 
and new times necessitate a new attitude. 

Eggshells are good, and every egg should have one. It 
keeps an egg in its proper place, up to the time when it 
ceases to be the proper place. When that time comes, a con- 
flict may develop between the egg and the shell the shell 
doing its best to keep the egg inside, and the egg becoming 
more and more imbued with the necessity of getting out. If 
the egg is successful in this contest, a more abundant life is 
possible. If the shell is successful, there's a mess. The egg- 
shell in such a crisis, is a glorious tradition, and it can be 
proved conclusively that the egg could never have become 
a successful egg without it. Nevertheless, if the tradition isn't 
broken when it should be broken, the result is a total loss. 

Success, it must be apparent, is relative. Not only is it 
necessary to amend the old formulas of success, but success 
in one period of existence may be a very different thing from 
success in any other. One could never learn to drive a motor 
car by hearing Grandpa tell how he used to drive a mule, no 
matter how successful a mule-driver the old gentleman might 
have been. It is not only that his rules would hardly apply, 
but, ten chances to one, his purposes and his objectives were 
not exactly the purposes and objectives of the would-be 

I am aware that there is a considerable demand in America 
for inspirational literature, and that many writers receive as 
much as $50 a week for telling their readers how to become 
millionaires. One may even learn how to become a Caesar or 
a Napoleon in Twelve Easy Lessons how to dominate every 


situation and how to master every problem which may pos- 
sibly arise. But all this is achieved, I understand, through 
"personality," "magnetism" and many other mysteries with 
which I am unacquainted; and I beg therefore to be excused. 

Even if I were in possession of an accurate formula by 
which everyone might become a great business leader, I 
should hesitate to give it out. Business leadership is the cry- 
ing need of the moment; but a world made up only of busi- 
ness leaders would be a horrible world to live in. 

On the other hand, a world in which business is not car- 
ried on successfully is always a horrible world. 

Business success, concededly, is not everything. If it were 
everything, in fact, it would be nothing. It might keep the 
race alive, but what would be the use of keeping a race 
alive if it had nothing more to do than to keep alive? It is 
culture and art and idealism, iris religion and spiritual aspi- 
ration, which give a meaning to life. Material success is 
important only because it makes all these other develop- 
ments possible. Getting a living is imperative if we hope to 
achieve life; but getting a living successfully does not neces- 
sarily mean successful living. 

Successful living is, first of all, conscious living. Intoxica- 
tion may drown our troubles, and opiates may deaden our 
pains, but neither can be associated with any sane notion of 
success. The successful life is positive. It seeks to master its 
environment, not to run away from reality, and to discover 
its relations and its obligations rather than to avoid them. 
To live successfully in the machine age it is necessary to find 
out what the machine age is. To whom does it relate us? To 
whom does it make us responsible? No one, surely, could be 
a successful husband and father, if he did not know or care 
which woman was his wife, or which children were depen- 
dent upon him. 

There are those, I know, who do not like the machine 


age and are constantly pointing out how much happier we 
would all be if we would only go back to some previous form 
of civilization, or on to some world of dreams. But this is 
rather pointless. A chicken which finds scratching difficult 
might prefer to go back to the egg from which it came, or to 
quit being a chicken and become a fish perhaps, instead; 
but if so, there isn't much that he can do about it. This is 
the machine age. It is the only age in which any of those now 
living can try to be successful. If it offers us an opportunity 
to make a better civilization, well and good. But we must 
understand it. We must find out what its actual conditions 
are and abide by them. This applies quite as much to artists 
and poets and preachers as it does to business men. We may 
or we may not try to understand the world in which we live; 
but if we do not achieve some understanding of it, we can 
not live in it successfully. 

Some will say, I know, that they are not interested in eco- 
nomics, or in business. But they are mistaken. What they 
should say is that they do not wish to recognize any such 
interest. They may not know it, but they are as vitally inter- 
ested in this new industrial order as is any business man. In 
the first place, no matter how spiritual they may be, they do 
have economic problems. In the second place, they belong to 
human life, and what is happening to human life is hap- 
pening to them. When earthquakes get busy, we can not 
ignore them on the ground that we are not interested in 
seismology. We may be the most confirmed landlubbers; 
nevertheless, the ocean is bound to arouse our interest if we 
have just fallen in. 

All of us are suddenly being precipitated into a new 
human society, and human nature being what it is, we can 
not live outside of human society. A few of us, to be sure, 
may become hermits. We may give up the comforts of civi- 
lization. We may go into the wilderness, and we may fancy 


that we have cut ourselves off from social connections. But it 
will be mere fancy. The chances are we will take some books 
along, forgetting that it required ages of social contacts to 
develop any written language and thus to make books pos- 
sible. If we are wise, we will also bring with us some socially 
acquired arts, some knowledge, for instance and some 
socially acquired, not instinctive knowledge of the kind of 
food upon which man can live, and of how to raise or catch 
and cook it. 

Not many, of course, will make an open effort to secede 
from human society. Not many are able to do so. Many may 
dream of getting away from the machine civilization, and 
living perhaps in some South Sea paradise; but it costs 
money, they discover, to indulge such dreams; and it is by 
getting into the machine civilization, not by getting away 
from it, that one gets money. - 

Incidentally, the only way that one can go to the South 
Sea Islands is to go there in a machine; and it is the machin- 
ery of modern business of advertising, of printing and pub- 
lishing, of organized lecture tours and radio talks, or of 
moving pictures through which one gets the notion that 
he would like to go. 

While few can escape physically from the machine civiliza- 
tion, there are many who are forever trying to escape men- 
tally or spiritually. They retreat into what they call the 
world of thought, as though there could be a world of 
thought apart from the world of actual human relations. 
They may even interpret Greek and Roman culture in terms 
of the economic order of their time; but economic practice 
and human culture today, they fancy, can go their separate 
ways. They can't. 

There is a tendency to ridicule the business man for his 
sordid preoccupation with profits. If he is inconsolable 
because he is not getting profits, there is a tendency to tell 


him that he ought not to want them so badly, just as there is 
a tendency on the part of the smugger middle classes to urge 
more "practical" objectives upon their poetic and idealistic 

Nothing much happens, however, as a result of all this 
urging. Business men go on trying to be business men and 
artists go on trying to be artists. This, I think, is rather 
fortunate. If business men did not want profits, they might, 
I grant, escape a lot of worries. But they wouldn't do any 
business. There would be no trade in the world, and no 
trade routes, and therefore no mingling of clan with clan 
and no development of civilizations, and of language and 
literature and art. 

Business success is very definitely related to human suc- 
cess, for it is in business, although the business man him- 
self may never have noticed it, that the social set-up is deter- 
mined, and it is impossible to proceed with any human 
development without relation to the human set-up. Even the 
institution of the family, which has had so much to do 
with the shaping of all human thought and sentiment, was 
basically an economic institution. If the family had not suc- 
ceeded in its economic objectives, if it had failed to nourish 
the babies and keep them alive until maturity, and to edu- 
cate and train them in the art of keeping alive, no mental or 
spiritual family culture would ever have been possible. 

This book, then, will have much to do with business suc- 
cess, but it is not being written solely for business men. It is 
being written for all who want to live successfully in the 
machine age. I am writing it, not because of any claim to 
superior authority, but because no other business man has 
yet seen fit to undertake the task; and it is a book which in 
the very nature of the subject must be written by a business 
man. It is on the frontier of business that the truths of this 
new machine civilization are being discovered. The busi- 


ness man may not be the best critic of that civilization. His 
training may even unfit him to describe it as it should be 
described. Nevertheless, some of the truths which he is in a 
position to discover are important social truths, as important 
to everybody as they are to him, and they can not too quickly 
become matters of common knowledge. 

The schools, unfortunately, in this machine civilization, 
are telling almost nothing about what the machine civiliza- 
tion actually is. They can not be blamed for this, for schools 
were born and reared in an altogether different social order, 
and they are still trying to interpret life in terms of the 
set-up of another age. They may teach business, but they 
teach it largely in terms of technical organization, bookkeep- 
ing and accounting and budgeting, and not in terms of the 
social revolution which business is bringing about. They 
may teach automobile mechanics, but they do not interpret 
to their students what the motor car is actually doing to 
human life. 

Even the current use of the term "machine civilization" is 
not very enlightening. It is a good enough term, if used 
properly, but those who use it most seem to understand it 
least. They may agree that machine production is inevitable; 
nevertheless, they seem to hold the profound conviction that 
the machine age is one thing and civilization another. 
Trained in the traditional philosophies, they try to apply 
their traditional thinking to utterly new situations; and 
when the facts refuse to conform to the philosophies, they 
conclude that there must be something wrong with the facts. 

That is why I have employed the term "mass production 
world." Mass production is the culmination of machine pro- 
duction. It came because it had to come. Like it or not, we 
must accept it; but mass production has the advantage of 
being a term which everybody may understand. 

Very few do understand it, even of those who think they 


understand the machine civilization. The machine civiliza- 
tion, as they see it, is a civilization so full of machinery that 
there isn't any room for human life, and to ask them to 
study this machinery, and find out how it actually works, 
may be asking the impossible. They may not be machine- 
minded at all. They may have no talent for mechanics. 
Moreover, if they try to study the civilization by studying 
machinery, they may find people employing machinery for 
all sorts of evil purposes. They may find machines used to 
exploit child labor. They may find criminal gangs, riding in 
high-power machines and armed with machine guns. They 
may even find that man's mechanical genius has found some 
of its most accurate expressions in evolving machinery for 
war and for the extermination of his fellow man. 

For one who really tries to find the meaning of mass pro- 
duction, no such confusion will result. Machinery may be 
used for anything; but mass production, which is the most 
effective method yet discovered for the use of machinery, can 
be used successfully only for certain purposes. 

Because it is the most effective method, it is the most 
profitable method. Therefore it already dominates the mar- 
ket and must displace all the old traditional methods. The 
very "lust for profit" makes this certain. Although not more 
than twenty-five per cent of production in America, the most 
highly developed industrial country, has yet been organized 
under true mass production methods, it is only a question 
of time, and of a short time at that, when the bulk of pro- 
duction and distribution will be carried on by mass produc- 
tion principles, not only in America but in all the countries 
which hope to compete with America in the matter of world 

Mass production, however, is profitable to others than 
employers. Demonstrably, it is the most profitable method 
yet discovered for industrial employees. It pays the highest 


wages. I shall explain why, later. It is enough to say now that 
it does so because it can and because it must. 

Mass production is also more profitable to consumers. 
Mass production means low prices, whether there is com- 
petition or not. Strangely, it does not make prices low for 
the purpose of eliminating competition or of injuring its 
competitors. Mass production has no interest in eliminating 
competition, and does not want to injure its competitors. 
This is not because mass producers are necessarily good, 
high-minded men, but because mass production industries 
have discovered that they are more prosperous when their 
competitors also are more prosperous. This too will all be 
explained in time. It is enough now to say that mass pro- 
duction constantly seeks to sell its products at the lowest pos- 
sible prices, and tries to make those prices lower and lower, 
because that is the way in which the greatest total profits 
may be attained. 

Mass production, then, is good for employers and work- 
ers and the consuming public. That means all of us. But it 
does not mean all of all of us. We are all employers or 
workers or consumers, to be sure, but most of us are some- 
thing vastly more. Most of us are human beings, and because 
we are human beings, we long to rise above the mere job of 
staying alive. We have some trace, at least, of spiritual aspi- 
ration, and we do well to ask how mass production will 
affect that. 

There are several ways of answering this question, but 
they must all begin with an understanding of mass pro- 

We must remember first that mass production is produc- 
tion for the masses. It is production motivated by the desire 
to sell the greatest possible quantities by giving the greatest 
possible values at the lowest possible cost to the greatest pos- 
sible number of people. It is so motivated, however, not 


because of any sudden outburst of altruism, but because the 
great stream of human selfishness compels that line of action. 
Since mass production must have the widest possible market, 
this complete abandonment to service is imperative. 

Whether this in itself contains any cultural advantage I 
shall not discuss here. Conceivably, we might have the busy 
cooperation of an ant hill, and not have a very high order of 
culture at that. Whatever culture we do have, however, will 
not be the old time class culture. Mass production, whether 
we like it or not, must destroy the old class system of society, 
and it must organize 'the whole economic machinery for the 
economic benefit of the masses. 

Since thus giving real service is presently to become the 
only course that pays, mass production can not provide for 
those who will not serve. There can be no leisure classes, 
and this certain elimination of the leisure classes is doubtless 
responsible for most of the intensely emotional attacks upon 
mass production. From the leisure classes, it has been 
pointed out, all the culture of human history has come. 
Books were written, pictures painted and all the great archi- 
tectural achievements designed, not by those who had to 
exhaust their time and energy in labor, but by those who 
were made free by the accident of social privilege to do as 
they wanted to do. 

While there will be no leisure classes under mass produc- 
tion, there will be leisure such a volume of leisure as the 
world has never known before. This approaching leisure is 
already manifesting itself in the eight-hour day for workers 
and even in the five-day week. This has happened, although 
mass production has just begun. Mass production must sell 
its products, and it must sell an ever-increasing volume of 
products to the masses; and if the masses do not have an ever- 
increasing supply of leisure, they will not become consumers 
on a sufficiently large scale. 


What they shall consume, however, must be their busi- 
ness, not the business of the producers to dictate. For mass 
production begins with discovering what the masses want, 
and since it gets its profits only from what the masses buy, it 
can not live unless it finds out accurately. Under a political 
dictatorship of industry the industrial administration might 
decide what is to be made, and distribute the product arbi- 
trarily to the public; but under mass production, the con- 
sumer necessarily has full say. He buys what he wants, and 
producers, who have not scientifically discovered what a 
sufficiently large number of people want, can not succeed. 

I do not mean, of course, that the masses now enjoy all 
the opportunities which mass production promises. If that 
were so, there would be no necessity for writing such a 
book as this. This book is written at a time when it has 
first become certain that we are to live in a mass pro- 
duction world, and when very few people have yet gone 
to the trouble of finding out exactly what mass production 
really is. 

Many confuse it still with mere large-scale production, 
utterly ignoring its business necessity for high wages, shorter 
hours, low prices and a higher standard of living. By ignor- 
ing this, they ignore the essential human relations of the 
new social set-up, and they jump to the conclusion that, 
since painting and poetry can not be successfully executed 
by machinery, mass production will create an ugly world; 
or that since the life is more than meat and the body more 
than raiment, a social order of material abundance must 
sap the moral and spiritual fiber of humanity. 

No one interested in successful living can afford to jump 
to such conclusions. Nor can he afford to jump to any oppo- 
site conclusions, for mass production brings with it new 
problems which the world has never had to face before. 
To accept the new order in a spirit of gullible optimism is 


to unfit oneself for an intelligent consideration of those 

There is, for instance, the tremendous problem of leisure. 
Relatively few people, in any social order, have known how 
to organize leisure in such a way as to escape the tyranny of 
fixed convention or the boredom of ignorant self-indulgence. 
But this burden of leisure, if we wish to call it that, is com- 
ing. It is almost here, and it calls for a revision of our edu- 
cational theories and efforts. The old conventions, it has 
been noted, are already yielding; and the codes which grew 
so naturally out of other social set-ups are being violated 
right and left. The new order must find a new morality 
based upon a new understanding of human relations, and a 
more practical control of long pent-up human impulses. 

That mass production is creating an ugly world seems to 
have no foundation in fact. Man has always longed for 
beauty, and mass production is giving him the power to 
make his world more beautiful. Mass production, instead of 
creating sameness, is bringing an infinite variety into the 
lives of masses who were compelled to face the dreary monot- 
ony of previous times. It turns out millions of automobiles, 
to be sure, which are pretty much alike, but the millions 
who drive them go their separate ways, instead of being 
bound, as they used to be bound, by the tyranny of their 
immediate neighbors. It has brought moving and talking 
pictures to millions, and pictures of a sort, it must be ad- 
mitted, whose comedy sometimes seems tragic and whose 
tragedy sometimes seems ridiculous. But these pictures have 
also brought the sights and sounds of the whole world to 
everybody's senses, and have done away with the old pro- 
vincialisms in many ways. 

That mass production is at least bringing numberless op- 
portunities to the masses is undeniable. Just how the masses 
will rise to these opportunities I do not profess to know, but 


I do know that they will not and can not rise to opportuni- 
ties which do not exist. The great opportunity for the 
masses of mankind to rise above the struggle for existence, 
and to partake of the life which the artists and poets and 
preachers are forever talking about, lies in the extension and 
perfection of mass production methods, and in an under- 
standing of the truths upon which those methods are based. 

It is poverty which standardizes, and mass production can 
not endure mass poverty. Poverty standardizes because it 
necessitates the spending of all one's time and energy upon 
the problem of keeping alive. If one's income is limited to 
fifteen cents a day, he must live in much the same way as 
does anyone else whose income is limited to fifteen cents a 
day, for there simply are not many ways of keeping alive on 
fifteen cents a day. 

Raise the general income to fifteen dollars a day, and there 
is at least some choice. The timid soul, of course, may not 
exercise this choice, and may insist upon imitating his neigh- 
bor, who is similarly imitating some other neighbor; but 
after one has experienced the futility of such proceedings, 
there is the chance, at least, of his striking out for himself, 
to achieve successful living in accordance with the actual 
laws of his personal being and the actual opportunities of 
his environment. 

Whether for good or ill, mass production is surely liber- 
ating man. It is giving him power, but it is as yet a most 
confusing power, for it is power which can not be employed 
successfully in the domination of his fellow man. All man's 
experiences, all his traditions, have caused him to associate 
the possession of power with such domination; but mass 
production substitutes facts for tradition, even in the matter 
of achieving a successful life. 

Just what is mass production doing to us? Just what are 
the facts? The sole purpose of this book is to find the answers 
to these questions. 



MUCH is said nowadays about the extreme complexity 
of modern business. Not enough is said about its 

Business, as Henry Ford does it, is quite understandable. 
The old-style business as it has traditionally been done defies" 
human understanding and causes the otherwise able and 
up-to-date business man to believe in inevitable "business 
cycles" much as his forebears believed in evil spirits. 

We can all understand the economic arrangement of the 
ancient patriarchal family. It carried on production and 
distribution, but little if any trade. What was produced was 
produced for the whole family and distributed to the whole 
family. There may have been injustices. Some of the chil- 
dren may have been pets and some of them may have had a 
relatively hard time. Nevertheless, the family assumed re- 
sponsibility for the physical needs and economic support of 
all its members; and whatever was produced was produced 
for the purpose of filling some specific need. There was 
nothing complicated about such an arrangement as that. 

It was when the family began to produce partly for itself 
and partly for outsiders toward whom it recognized no such 
responsibility, that complications set in. The change was 
such a gradual process, however, that it probably caused no 
particular bewilderment. It just naturally happened that a 
family would produce more wheat, or raise more sheep, or 
make more implements, perhaps, than it needed for its own 
use, while it was rather short of some product of which some 
other family had happened to produce a surplus. Exchange, 
in such a situation, was profitable to both sides. 



It was so profitable, in fact, that the practice grew; and 
certain persons, with an eye to profit, began to specialize in 
trading the surplus of one family for the surplus of some 
family which lived at such a distance as to make direct 
barter, without the intervention of such a middleman, im- 

When this practice of trading developed, things became 
more complicated. No family, in the end, it seemed, could 
live quite so completely unto itself as families traditionally 
had lived. Even if it didn't want to trade, it had to help sup- 
port the institutions which now had to be set up to keep 
the trade routes in order. That is, it had to pay taxes to sup- 
port some "ruling family" the institution which eventually 
became known as the state. Many families, in fact, quit till- 
ing the soil and specialized instead in making things to 
trade. Even today, we speak of "learning a trade," although 
the learner does not intend to engage in trade at all. 

Little by little, through the centuries, more and more of 
men's energies went into making things to sell, and selling 
them; but not until the first industrial revolution occurred 
did this become the dominant economic practice. 

Then came confusion. That confusion is now under- 
standable, but while it was on, the thing which was known 
as the business system was not understandable. Profound 
scholars studied it, supposing that it was a system, but the 
result was a "dismal science" known as economics, which was 
dismal principally because it was not a science. 

Studying a system which was not a system could of course 
lead nowhere, no matter how intellectual the scholars might 
be. And this so-called business system was not a system. 

The family was a system. It consisted of producers and 
consumers of the same persons, in fact, functioning in both 
capacities. Production was definitely related to consumption, 
and consumption to production. If production was good, 


consumption automatically became good; and only if pro- 
duction was poor did the members of the family become 

But this new, so-called economic system consisted of pro- 
ducers and sellers. The buyers and consumers were not in- 
cluded, although production and sales were necessarily de- 
pendent upon purchases and consumption. Things were no 
longer being produced primarily for use, they were being 
produced to sell; and not to sell to human beings because 
of their need for them, but to sell to a vague, impersonal 
conception known as "the market" which seemed to have 
little definite relation to human need. 

It must have been known, of course, that there could have 
been no market unless there was some real or fancied human 
need. People would not buy things in any great quantities 
unless they wanted to have them, either to use themselves 
or to sell to others who might wish to use them. But it was 
not human wants which business considered. It was, at best, 
the wants of those who happened to have purchasing power. 

How people got their purchasing power was a detail of 
business with which, it was supposed, business men did not 
need to concern themselves. Buying power, it must have 
seemed to them, just happened. God willed, as they thought, 
that a few people here and there should be rich, and that 
the masses should be very poor; and that being the case, the 
masses couldn't be expected to buy very much, and one 
could not do a very profitable business with the masses any- 
way. The way to do business, it was supposed, was to offer 
things for sale to people who had plenty of money; and if 
one got a large profit on everything he sold to such people, 
he would be doing about as well as could be expected. 

Even the majority of the producers, in fact, were not in- 
cluded in this concept of the business structure. It was only 
the owners of factories and those who held a property in- 


terest in them. The vast majority of the producers were mere 
employees. They were just labor; and labor was supposed to 
be a commodity just like anything else, to be bought as 
cheaply as the buyer could buy it, and to be sold as dearly 
as the seller could sell. 

Occasionally a factory owner tried to be good to his em- 
ployees, and to include them in the benefits which his busi- 
ness was receiving, sometimes by higher wages, sometimes 
by profit-sharing, sometimes by trying to develop a cozy 
"family" atmosphere within the factory. At times such 
schemes, although not entered upon with such an intention, 
proved profitable. At other times they failed. But no one 
seemed to know why. If they were successful, it was often 
supposed that God had put natural law aside for the time 
being and blessed this particular employer for being good. 
If they failed, it was likely to be laid to the human depravity 
of the employees. No one seemed to understand that a fac- 
tory could not be a family. 

A family, in the old patriarchal days when the family was 
the economic system, could live unto itself. That, in fact, 
is what made it an economic system. But no factory could 
live unto itself; it had to depend upon the buyers of its 
products, whatever part of the world they might be living 
in, or however alien they might seem to the factory workers. 
But these buyers were not included in the factory program, 
even of the good, generous, idealistic employer; and even 
the welfare of the factory workers was not included in the 
average factory program. It was not considered "good busi- 
ness" to include it. 

And all this time (although nobody seemed to notice it) 
good business depended upon the manufacture and distri- 
bution, not merely of goods, but of buying power. All the 
traditional concepts of wealth were false. Factory production 
was making them false, and factory practice was actually 


proving them to be false; but, until the advent of mass pro- 
duction, nobody could understand why. 

It was universally supposed, for instance, that labor was 
a commodity. Nevertheless, labor could not and did not act 
like a commodity. It acted like human beings. It acted, in 
fact, from much the same motives with which employers 
acted, and not even the most dismal economist supposed that 
employers were commodities. 

Workers struck for higher wages, and employers hated and 
fought them for doing so. Nevertheless, when they got higher 
wages, although the workers themselves had no such inten- 
tion, they often benefited their employers. For they gained 
more buying power; and while they may not have directly 
bought the things which their particular employers had to 
sell, they bought a lot of other things with these higher 
wages and made business that much better in many other 

By buying these things, moreover, they created a demand 
for more employment, and this greater demand for labor 
sent the price of labor up, so that workers generally were 
likely soon to have more buying power, and business then 
boomed in almost every line. In other words, there was a 
period of "good times." There were many reasons, of course, 
for the recurrence of these periods, but one of the principal 
causes was that labor, organized in labor unions, fought des- 
perately for higher wages against what both sides commonly 
supposed to be the employers' best interests. 

These good times, however, did not usually last very long. 
And the principal reason that they did not last was that the 
added buying power which the workers had gained was soon 
taken away from them, not directly by lowering wages, but 
by increasing prices. Everybody supposed that the employ- 
ers were selfish, and no doubt they were. But the cause of 
their undoing in these recurring panics w r as not their selfish- 


ness but their failure to attend to the necessary work of 
producing and distributing buying power. 

The purpose of business is to supply human wants, not to 
enforce any divine right to tax consumers, just as surely as 
the purpose of government is to ensure justice and order and 
not to enforce any divine right to govern. A business, like a 
government, may honestly fail in its purpose; and in that 
case, some stronger, even though not so well-intentioned, 
power may succeed. But if a government utterly ignores its 
purpose, and supposes that it exists for the pleasure of the 
governors, its doom is already sealed; and if business imag- 
ines it can make profits by producing goods which by too 
high prices it prevents customers from buying, the doom 
of that business is sealed. 

Business men, to be sure, for a century and a half, did sup- 
pose exactly that, and ninety per cent or more of those who 
entered business failed. It can not be said, moreover, that 
the remaining ten per cent went in very determinedly for 
service. But in an army of blind men, a one-eyed man will 
be the leader; and the businesses which did give the best 
service, everything being considered, survived. 

Many of these, by their better methods, were able to 
undersell all competition and became great "trusts." Then, 
instead of continuing their better methods, which had made 
it possible for them to increase the buying power of the 
public through lower prices, they betrayed a complete igno- 
rance of the real principles of success and tried to make 
prices high once more. 

Eventually the idea of mass production dawned. It can 
hardly be said that anyone invented it, but Henry Ford was 
its first large-scale demonstrator. Even before Ford's time, 
Andrew Carnegie had discovered that the steel business 
could make greater profits by manufacturing all the steel it 
could, and selling it at low prices, than by limiting pro- 


duction and charging prices which such limited and there- 
fore such expensive production would seem to make neces- 
sary. But Carnegie fought his employees, and could not see 
that the wages which the labor unions demanded were ad- 
vantageous also to his business. It remained for Ford to give 
higher wages than even the unions demanded, along with 
shorter hours, and simultaneously to reduce the price of his 
product to a point which enabled the masses to buy it, and 
to build up such a business for him that his profits were 
far greater than Carnegie's. 

This was an astounding thing to do. The whole world 
blinked and rubbed its eyes, and business men everywhere 
were puzzled to distraction. Ford, they said, had upset the 
wage level. He had ruined the whole structure of business. 
The result must be, as they saw it, to encourage workers 
everywhere to demand similar wages, and there can be no 
doubt that it did have some such effect. The one ray of hope 
on the horizon was the verdict of those who gave their "calm 
business judgment," that such tactics would soon utterly 
ruin Ford. 

But the tactics did not ruin Ford. They made him what 
he is today. Soon Ford's rivals in the automobile business, 
and later the wiser heads of other great industries, began to 
see what Ford was actually doing, and that his ever-growing 
success was no miracle at all but a direct result of the tactics 
which he had employed. So they began to follow Ford, and 
the era of mass production was on. 

Mass production, it turned out, was not a mystifying 
process. What had made it seem mystifying was its very 
simplicity. Ford used research, but other successful big 
businesses had long been doing that. Ford introduced every 
possible improvement in machinery, but so had many others. 
He looked for as large a market as he could get, but that 
surely was not a new idea. The one new and revolutionary 


idea of Ford seemed to be his discovery that he could not 
sell more cars than the public could buy, and hence he de- 
voted himself and his business not merely to the manufac- 
ture and selling of motor cars but to the manufacture and 
distribution of buying power. 

Business, from the beginnings of machine production, had 
been increasing the world's wealth, and this increase of 
wealth had been enlarging the world's buying power. Busi- 
ness, therefore, was creating a market for itself, but it was 
not doing so systematically. It thought of the market, rather, 
as something beyond its control; and when it thought of 
adjusting production and consumption, it thought of re- 
ducing production to existing buying power, utterly ignor- 
ing the fact that such a reduction would merely result 
through unemployment in a further reduction of buying 
power and, if carried to its logical conclusion, must destroy 
machine industry altogether. 

Big Business, even before Ford's time, was constantly dis- 
covering ways of producing more and more, and engaged in 
strenuous research for methods which would enable it to 
produce more and more. Also, it eagerly sought new mar- 
kets; and it stopped at nothing, it seemed, not even war, to 
procure them. It adopted all sorts of schemes for high- 
pressure selling of things which people lacked the power to 
buy, and by making prices as high as possible, and wages as 
low as possible, business made its selling as difficult as 

Mass production is a much simpler process. However in- 
volved its mechanism may be, its objectives are never in 
doubt; and it employs actual fact-finding, not the traditions 
of some previous social order, to achieve them. It under- 
stands, to start with, that its success depends upon answering 
some widespread human want, and employs fact-finding, 
rather than mere hunches, to discover what the masses want. 


It understands, moreover, that while the needs of the masses 
may be unlimited, their buying power is limited, and em- 
ploys fact-finding again to bring prices within their buying 
power. But it does not stop with that. With more mass buy- 
ing power, still more needs might be supplied and still 
more profitable mass production markets found; hence it 
employs fact-finding to discover how to create and distribute 
more and more buying power. 

This is production for use once more. This is an economic 
system, and the story of what it is doing to human life con- 
stitutes no dismal science. 



MONEY is not a thing in itself. Money is a symbol of 
something else, and has no existence as money ex- 
cepting in its relation to that other thing. That other thing 
is wealth, and wealth is but a term for things which supply 
human wants. One might collect all the money in the world 
and, if the wealth of the world by any chance should vanish, 
he would have no money, for that which had been a symbol 
of wealth would automatically become a symbol of nothing 
at all. 

How much money there is in any society depends not 
upon how many certificates called dollars are in existence, 
but upon how efficiently these dollars are serving human 
needs. This, of course, depends upon how advanced the 
machinery of production and distribution is, but it depends 
equally upon whether the money is being distributed so that 
those who need things are able to buy. The essential dif- 
ference between the old system of production and the in- 
coming system of mass production, then, may be stated in 
terms of the consumer's dollar. Under the old system, busi- 
ness sought to sell to those who happened to have dollars. 
Under the new system, business seeks to supply human 
needs and to see, therefore, that all would-be consumers are 
adequately supplied with dollars. 

To take that dollar away from the consumer is still the 
object of business. But not with the old notion of what such 
a transaction means. It is now understood what dollars are 
for. Dollars are of no use to anyone excepting as they are 
taken away. Money, it has long been known, is only a 



medium of exchange; and if it is not used for what it is good 
for, it ceases to be money. 

While this has long been known, however, it has not long 
been recognized as a practical economic principle. The 
reasons are obvious, for business which was always concerned 
with taking away the consumer's dollar has never before 
recognized the necessity of giving it back. Getting it back 
was supposed to be the consumer's individual responsibility, 
and the masses of consumers were never quite equal to the 
task. For fear they might not get another dollar, they hung 
on, as a rule, to the one which they had, only spending it as 
dire necessity compelled. And the business men and econo- 
mists, not perceiving the business necessity of providing con- 
sumers with buying power, took it for granted that this was 
the thing for the masses to do. They thought it was natural 
that the masses should put up with their old standard of 
living, even when new processes were making a higher stand- 
ard of living possible, without considering that if business 
failed to find a market for the greater volume of goods which 
it was now producing, business itself would be sure to suffer. 
So they encouraged thrift. They encouraged non-buying 
when more buying was a business necessity. Only when the 
great industrial mechanism had been built up, and compe- 
tition became so severe that a systematic drive for the con- 
sumer's dollar was absolutely necessary, did business begin 
to adjust itself to the real laws of money. 

The adjustment, however, has only begun. It is true, as we 
have pointed out, that mass production has definitely set out 
to create and distribute mass buying power. This means 
that it has discovered the business necessity for high wages, 
low prices, a shorter workday, with more leisure, more 
money and a higher and ever higher standard of living for 
all. But this was only the beginning of the social revolution 
which is now in progress; for a clear view of the consumer's 


dollar discloses a social force at work which promises not 
only to solve our most knotty business problems, but to 
solve some of the social problems which have been the 
despair of moralists and statesmen and which many a social 
philosopher has given up as insoluble. 

There is, for example, the problem of waste and ineffi- 
ciency in government; the problem of social dishonesty; the 
problem of graft and racketeering; even, to a large extent, 
the problem of crime. 

These are large words, for the problems I speak of seem to 
be almost as old as human life. Always it has been sought to 
solve them through moral teachings, or through effecting 
some change in human nature through which man would 
agree to live less selfishly. Always, however, it was believed, 
even by the teachers themselves, that the wealth which every- 
body seemed depraved enough to covet could be attained 
only by taking it away from others. 

The religious and educational institutions, moreover, 
while they often inveighed against such covetousness, seemed 
always to become entangled with the institutions which had 
coveted and taken wealth from others. Even wealth for good 
causes, even wealth for education and religion, even wealth 
for the political campaigns of reformers, had to come from 
those who had it; and those who had it had obtained it in 
ways which the moralists did not like to inspect. Business, in 
those days, did not even claim to be service. It was and 
claimed to be purely acquisitive. Whether it was even 
honest, or not, depended upon what standards of honesty 
one employed. 

There was a widespread theory that selfishness was sinful, 
and widespread adoration of saints who had renounced the 
world and dedicated themselves to poverty. There was, how- 
ever, a general understanding that "business is business"; 
and whatever doctrines one absorbed on Sunday, in the 


actual workaday world it was assumed that everyone would 
look out for himself. 

Only if people "went too far" was great moral indignation 
aroused. Even then it might be a hard task to arouse it; but 
occasionally governments became so corrupt that it became 
possible to fan the community into anger. That politicians 
would be selfish was expected. That whatever they did would 
be done with an eye first to their own political advantage 
seemed to surprise no one. Practical business men, in fact, 
after having experience with utterly inefficient theorists in 
politics, rather preferred to deal with practical politicians, 
even if some of their actions would not always bear the light 
of day. Time and again, however, when corruption had 
reached unendurable limits, there was an emotional wave of 
reform. That was the only way, it was supposed, human 
nature being what it was, by which politics might conceiv- 
ably be purified. 

A real study of the consumer's dollar will change all this. 
Graft must go, not because of any moral indignation about 
it, but because business is certain, in the near future, to 
find out what business is. The consumer's dollar, it must 
soon be learned, pays for everything. It not only pays for 
all the things which business sells, but it pays for all the 
wages and salaries which business pays out and for all the 
profits which business takes in. It pays, moreover, for every 
item of waste and inefficiency in business, both public 
and private; and every business is so completely dependent 
upon the mass consumer's dollar, that every business man, 
when he discovers the situation, must soon be fighting to 
preserve that dollar as earnestly and as constantly as he can 
be depended upon to fight for the preservation of his own 

It has already been discovered that the dollar of the aver- 
age consumer is mortgaged for sixty-five per cent of its value 


before the average business man has any chance to deal with 
it at all. That is, the average American worker pays out 
sixty-five per cent of his income for food and rent. People 
with large incomes, of course, if they have any sense, will not 
devote so large a part of their income to food and housing, 
while those who are living close to the poverty line may 
have to spend nearly all of theirs. But sixty-five per cent is 
the average; and this means that the average consumer has 
but thirty-five cents of every dollar in his possession avail- 
able for all the other necessities of life for education, recre- 
ation, medical care and for the purchase of all the things 
which the average business man has to sell. 

Before business began to study the consumer's dollar, each 
business man was inclined to think of his business as his own 
private affair, and to think "of everybody else's business as 
his private affair. Even public affairs did not usually con- 
cern him much, excepting as they might raise his own taxes 
or put him at the mercy of some competitor. As a citizen, 
he might theoretically object to special privileges; but as a 
business man, he was not at all averse to special privileges 
being handed out to him. Whatever his theories of citizen- 
ship might be, moreover, he felt that he could not give much 
time to public affairs without neglecting his own business; 
and if he did pay much attention to them, he did so out of 
the goodness of his heart. The result was that his own busi- 
ness got regular, dependable, systematic attention, while 
public business received such sporadic notice as might be 
given to it when the community was aroused by some par- 
ticularly criminal development, or some dramatic climax 
to a regime of graft. 

But that time is passing. It is passing because the nature 
of the consumer's dollar is being discovered. The consumer's 
dollar, it is being noticed, is not static. It expands and con- 
tracts. When it is large, a great deal of business can be car- 


ried on. When it is small, business generally, including 
almost everybody's business, is likely to be bad. 

The consumer's dollar, however, doesn't grow on bushes. 
It comes mostly from wages and salaries, to some degree from 
dividends, profits, rents, royalties and interest. There are 
many wealthy people, of course, but they hardly count as 
consumers; for what the wealthy actually consume, all told, 
amounts to a very small part of our modern business. Rocke- 
feller and Ford buy about all they think they ought to, any- 
way. If Ford wants a new suit, he gets it, without stopping 
to figure up whether he has had a good year or not; and if 
Rockefeller wants an electric refrigerator, he gets that. That 
isn't the way with the average consumer the consumer 
upon whom modern business depends. It doesn't matter how 
much he wants anything he has to look at his dollar before 
he gets it. If that dollar is in good shape, the deal goes 
through. If it isn't, there's likely to be difficulty, and the 
garment and refrigerator industries will suffer. 

But what keeps that dollar in good shape? In the days 
before business got to studying the facts, it was supposed that 
the dollar could be kept intact by not spending it. But busi- 
ness men now know better. In the first place, sixty-five cents 
of it must be spent anyway, for people are not going to get 
along, if they can help it, without food and shelter. And 
then, if the remaining thirty-five cents isn't spent for other 
things, those who are employed in producing and distrib- 
uting the other things will find their jobs gone, and with 
their jobs gone, their dollar will soon be gone. Whatever 
may be said of other dollars, saving the consumer's dollar 
wears it out in no time. One might as well talk of saving his 
breath. The only normal way in which one can save the 
breath he breathes is to exhale it as rapidly as he inhales it 
that is, spend it as fast as he takes it in. That is the way 


the heart saves its blood, or the stomach its food not by 
hanging on to it, but by letting it function. 

There are other things, however, besides non-buying, 
which cause the consumer's dollar to shrink. The chief of 
these is the buying of less than the dollar might be made to 
buy, that is, paying unnecessarily high prices for anything 
which is bought. Thirty-five cents, it must be remembered, 
must cover almost all the buying anyway; and if one pays 
too much for one article, he must go without some other. 
Business becomes bad, then, with those who are producing 
and trying to sell the other things; and there is unemploy- 
ment and a shrinking of the dollar again, which reacts as 
badly upon the business which charged too much as it does 
upon any other. 

Now, what causes high prices? There can be only one 
answer. It is failure to follow methods by which prices can 
be made as low as possible. This is bad business, any way you 
look at it. First, such high prices limit sales and make it 
impossible to adopt the great economies of mass production. 
Secondly, they leave the consumer too poor to buy other 
things which he might otherwise have bought, and unable, 
therefore, to give the employment which he might have 

In a word, high prices are caused by waste. Waste in the 
processes of production and distribution is the great enemy 
of the consumer's dollar. Everything which the consumer 
buys, if he gets the fullest possible value for his money, gives 
maximum employment to other consumers, makes business 
as prosperous as business can be and enlarges the consumer's 
dollar. Every time, however, that the consumer pays more 
than the most scientific methods of production and distri- 
bution make it necessary for him to pay, there must be less 
buying than there might have been, with consequent less 


employment and a further shrinkage of the consumer's 

Now, then, it isn't a question of moral indignation if the 
business man decides to war on waste. He must so decide 
very soon; in fact, he is so deciding, but there is no more 
moral indignation about it than there used to be when he 
decided to attend faithfully to his own affairs. Waste has now 
become his affair waste in every process of production and 
distribution whether that waste is in the business which he 
nominally controls, whether it is in the business of his city, 
state or nation, or in medical practice, in education, in 
housing, banking, transportation, public franchises or other 
things which he might once have considered none of his 
business at all. 

I am not claiming that every business man sees this clearly 
yet. But the real leaders of business see it, and those who 
do see it most clearly are inevitably becoming business 

It is a partial consciousness of these facts, at least, which 
has caused what is known as the "New Competition" and 
induced so many businesses in America to quit quarrelling 
with each other and make, if they can, a concerted effort to 
get their share of the consumer's dollar. The trade associa- 
tions, although they may not know it, are really organizing 
in response to this new discovery. Their members used to 
compete bitterly with each other, and do what they could to 
destroy each other. Now they have discovered, not how to 
let each other alone, but how to cooperate, how to pool 
their knowledge, how to instruct and help each other so 
that all may do a bigger and better business than would 
otherwise be possible. 

This coordination, of course, must go still further. The 
New Competition must give way to a still newer compe- 
tition, in which business in general will get together to pro- 


tect the consumer's dollar. To be sure, it will aim to take 
this dollar, and to take it as rapidly as possible; but as the 
nature of the consumer's dollar becomes understood, this 
process of taking away his dollar will be seen to be the 
process, not of impoverishing, but of enriching him. For 
money, it will be understood, is not wealth. It is but a sym- 
bol of wealth. Money which is not functioning is, at best, 
a symbol of wealth which is not being used. The Dollar 
Going Out, however, is a symbol of Wealth Coming In. The 
purpose of business is to get wealth to people to produce 
and to distribute to all humanity the things which human- 
ity, with its new-found power, can now be organized to make 
only if it can be organized to buy and use them. 

And how will this affect inefficiency and graft in govern- 
ment? The plain answer is that business, when it once per- 
ceives the true nature of the consumer's dollar, simply can 
not tolerate any such thing. Waste in government destroys 
the market which efficient business must have. The count 
against it now is not that it raises taxes, but that it doesn't 
give back value received, and the consumer upon whom 
all business depends is rendered unable to buy the things 
he might otherwise buy. 

Such graft has been tolerated in the past, partly because 
government work seemed to provide jobs. A study of the 
consumer's dollar, however, reveals that work which does 
not produce maximum wealth for the consumer, causes 
rather than eliminates unemployment; for it prevents the 
consumer from giving a full dollar's worth of employment 
for every dollar which he spends. If government work were 
generally as efficient as so-called private industry, real busi- 
ness would have no objection to the consumer paying for it. 
If the consumer gets value received for his money, his dollar 
is not destroyed. It is non-buying his failure to use his 
dollar or his using it inefficiently which impairs his buy- 


ing power. The business man, therefore, need not worry 
about money being spent for public works, providing the 
works in question consist of the making of things which the 
public really wants and there is no waste effort involved in 
making them. 

If there is graft, of course, there is waste, for graft is the 
taking of money without giving its equivalent in service. 
And if there is inefficiency, there is waste, for that involves 
the payment of money without obtaining maximum results. 
The greatest waste of all, however, is unemployment; for 
with graft and inefficiency rampant, some minimum of 
wealth at least is brought into existence, whereas unemploy- 
ment is total waste in that it produces no wealth whatever. 

All this waste comes out of the consumer's dollar. That is 
perhaps the most important statement in this book, for when 
that truth is once understood, it gives the business man a 
new approach to all his problems. Instead of thinking of 
government expenditures in terms of their cost, and of the 
necessary taxes involved, he must now think of them clearly 
in terms of their returns their returns to the consumer. 
What will such an outlay do to his dollar? Particularly, how 
will it affect that thirty-five cents with which most of his 
shopping must necessarily be done? If the work is needed, 
if there is man-power available to carry it on, and if it can 
be positively assured that there will be no graft or inef- 
ficiency connected with the process, then the consumer's 
dollar will not be impaired. In fact, if there is man-power 
available for needed work and the work is not carried on, 
the worst sort of waste unemployment must result, and 
the consumer's dollar will fall far short of its possibilities. 

But can business men be positively assured that there will 
be no graft and that there will be efficient management in 
public undertakings? Yes with this new understanding on 
their part of what these things actually mean. Heretofore, 


they have not prevented it because they did not consider it 
their business. When they went into politics, as a rule, they 
either went in to get some special favors or, having reached 
the conclusion that special privileges were morally wrong, 
they entered in a spirit of public devotion (until they got 
tired or until they concluded that they had no more time 
to spare) upon some campaign to get things done more 

If their own executives were inefficient, however, or if 
their business was being taken away from them by their 
competitors, they gave the matter first and constant atten- 
tion. It was not a case then of such time as they might have 
to spare. It was a case of prime business necessity much as 
political honesty and efficiency will be just as soon as it is 
clearly seen how dishonesty and inefficiency affect the con- 
sumer's dollar. 

Heretofore, now and then, business men have got together 
and called for a "business administration." Sometimes they 
elected their candidates. More often they failed. In either 
case, there was no business administration, for no one had 
any clear idea of what a business administration would be. 
The purpose of business, however, is now becoming clear. 
It is to get things to the consumer to fill as many of his 
wants as possible with the least possible strain upon his 
dollar. That understanding will not only result in business 
going into politics, and securing a genuine business adminis- 
tration, but what is perhaps more important securing a 
business administration of business too. 

Heretofore, as an illustration, producers have been con- 
tent to be producers; and if they found difficulty in distrib- 
uting their products, about the most they have thought of 
doing was to set up a retailing business for themselves. The 
fact that the average article of merchandise usually sold over 
the average retail counter at three or four and sometimes 


eight or ten times the cost of production did not seem to be 
the average manufacturer's business. 

Now he must see, however, that it is his business. It is 
preposterous that it shall cost three or four times as much to 
sell a product as it costs to make it; and even if a producer 
brings down his own selling costs, he has not by any means 
solved the problem, so long as the bulk of our merchandising 
is done in this grossly inefficient way. For such inefficiency 
eats up the consumer's dollar and leaves him with too little 
money available to buy even those things which are dis- 
tributed efficiently. 

It must soon become one of the first objectives of all mod- 
ern business to eliminate these enormous wastes of retailing. 
That they can be eliminated no modern mind will doubt, 
after the experience which we have had in eliminating the 
wastes of production; but they can not be eliminated while 
confusion still reigns as to what the real purpose of business 
is. While that confusion exists, it will be possible to carry on 
propaganda against the chain stores, or against any other for- 
ward step in the field of distribution, on the ground that 
they deprive somebody of his right to employ more waste- 
ful methods. When the real meaning of the consumer's 
dollar becomes clear, however, all such propaganda will be 
immediately recognized as dangerously wrong. The only 
right one has in business rests upon his ability to get things 
to people at a lower and lower cost, coupled with his ability 
so to distribute buying power that the consumer's dollar will 
be left not only unimpaired but unthreatened. 

This power is discovered in mass production and mass 
distribution. When they become the rule, as they must, 
instead of the exception, consumers will not only be able to 
buy the things they want, but the fear that their buying 
power may be one day interrupted through unemployment 
will then have passed away. So long as business did not un- 


derstand its own objective, this could never be; and even 
those who had money with which to buy were justifiably 
afraid to spend it, and, by non-spending, they brought on 
the disaster of unemployment which they feared. With busi- 
ness understanding its objectives, however, this fear will 
pass, for even among the wildest attacks upon business men, 
they have never been accused of negligence or inattention to 
what they understood to be their own best interests. 

I am not speaking, moreover, of any far-off time, when 
business men shall be thoroughly awakened to their social 
responsibilities. The awakening which I speak of is already 
happening. It has been happening since 1921, and the signs 
of the awakening are now abundant. Never before did great 
business leaders, thinking strictly in terms of business pros- 
perity, engage in agitation to keep wages up. Never before 
has Big Business worried over the plight of the farmers; and 
never before has it been stated in so many business gather- 
ings that business, for business reasons, must find a way to 
abolish unemployment. 

Not all business men, to be sure, are yet awake. Not even 
a majority. But it is the successful leaders of business, not 
its disgruntled failures, who are doing their utmost to arouse 
the rank and file. It is Henry Ford, for instance, not some 
Senate radical, who has announced the abolition of poverty 
as our necessary business goal. Many financiers, to be sure, 
object, for the structure of our financial system does not 
readily lend itself to such a revolutionary task. Financial sys- 
tems, however, do not determine the course of business evo- 
lution. They follow it. Our financial system is what it is 
because, with the coming of machine industry, business had 
need of such a system; and it will be something very differ- 
ent in the near future when the needs of mass production are 
once clearly understood. 

Wall Street is not yet organized to conserve the consumer's 


dollar, but Wall Street must become so organized, or the 
power of Wall Street will pass away. Low-cost production 
demands low-cost financing; and just as high-cost production 
and high-cost distribution have already proved themselves 
unprofitable, all financial practices which do not tend to 
benefit the consumer and enable his dollar to go farther 
and ever farther, must soon prove to be unprofitable. 

This is not theorizing. It is a mathematical certainty. Mass 
production, having been discovered, can not be abandoned. 
Human society, having learned how to supply all human 
needs abundantly, can not unlearn the method; and busi- 
ness, having once discovered that the way of the greatest 
total profits is the way of the greatest human service, is con- 
stitutionally incapacitated to forget it. If human nature were 
unselfish, of course, this might not be true. In that case, busi- 
ness men might become disinterested in their own welfare 
and equally disinterested in the welfare of everybody else. 
Fortunately, however, human selfishness is dependable. So 
long as people suppose that they can serve themselves best 
through neglecting the masses, the interests of the masses 
will be almost certainly neglected. It just happens, however, 
that mass production production for the masses is far 
more profitable; and mass production necessitates mass dis- 
tribution and mass finance. The consumer's dollar has been 
discovered; and unless that dollar is defended and protected 
on every front, nobody's dollar is safe. 



TO THE average conservative banker the term "mass 
credit" seems to have no meaning. He may think of 
himself as a credit expert too; and he may admit for he can 
scarcely deny it that we are living in an age of mass pro- 
duction. He may even see that mass production demands 
that the masses shall be able to buy more things; but it does 
not occur to him, apparently, to help the masses to do any 
such thing. He is much more likely to act his traditional 
Ben Franklin role and advise them to save, as their 
sturdy forefathers saved, until eventually they accumulate 
more cash. 

But where, one may ask, will the masses get this cash? 

"From their wages, of course." 

But where will they get wages? 

"From their employment," the banker must answer, for 
there is no other great source of income for the masses of 
any industrial society. 

But where will they get employment if the factories which 
have been employing them are not able to sell their products 
and are forced to discharge their employees? 

Now, one should not blame the average banker too se- 
verely if he is unable to answer this question, any more than 
one should blame a veterinary surgeon if he is unable to cure 
a sick automobile. The conservative banker simply has not 
studied mass credit. It has not been any part of his training 
to study the masses at all. He learned his banking from 
another age an age in which it was absolutely necessary, if 
there was ever to be a machine civilization, that the people 
generally should consume much less than they were pro- 



ducing, and that the resulting surplus be employed in the 
financing of more production. 

This social function of banking, to be sure, may not have 
been clear either to bankers or depositors. People were in- 
duced to save, and to put their money in the bank, so that 
it might draw interest for themselves; and bankers loaned 
these savings to business men, not with any thought of 
building a new social order, but because new machine 
methods promised dividends for the capital invested. 

The bankers were the trusted administrators of the 
people's savings, and it was their business to see that these 
savings were adequately secured. But what constituted ade- 
quate security? That was a question which was naturally 
hard to answer, considering how the loans were being used. 
They were being used, as we now see, to erect a new civili- 
zation; but no one knew this at the time and it was quite out 
of the question to offer shares in the new civilization as 
security for the actual loan of cold, hard, old-civilization 
cash. So the bankers answered the question by deciding that 
proper security is that security which by long experience has 
proved to be safe. 

This seemingly fundamental principle of conservative 
banking contains a note of irony, for in times of great social 
change, long experience is the very thing upon which we 
can not rely. A stagecoach may have been profitable for ever 
so long, but its profits will surely cease when the railroad is 
put through. If we permit ourselves to be guided by long 
experience, rather than by actual events, we might lend 
money to the railroad and accept stagecoach holdings as 
security, but all that we would ever get out of such a trans- 
action would be more experience. 

Many have blamed the recklessness of bankers for the 
financial difficulties of recent times, and undoubtedly reck- 
less bankers have played a sad and disastrous role. But it is 


the conservative banker, the one who most conscientiously 
follows the "best traditions of banking," who is likely to fail 
most conspicuously in his attempts to solve these latter-day 
problems of finance. In 1930 and 1931, for instance, when 
Mr. Ford and other leading industrialists were pointing out 
the necessity of maintaining and advancing wages so that 
industry would not perish for lack of buying, many of our 
largest and in many ways most capable bankers were de- 
claring that wages must be reduced. To the layman reading 
these utterly contradictory pronouncements, it must have 
seemed that one group or the other must be fools. But such 
was not the case. The bankers were quite as learned and 
quite as logical as the industrialists; but because they were 
conservative bankers, because they were compelled to think 
in terms of banking experience rather than in terms of 
present-day industrial events, their leadership was as disas- 
trous as the leadership of demagogues. Like learned and 
logical veterinaries, they applied their liniments. They were 
the best liniments, perhaps, that long experience with horses 
had yet developed; but they had neglected to notice that the 
machine age had arrived and that a motor car is not a horse. 

The traditions of banking were not developed in the 
machine civilization. They were developed in the days when 
it was necessary to create a machine civilization out of an 
agricultural civilization. It is necessary to discard those tra- 
ditions now only because the machine civilization has been 

There is nothing mystifying in this social change if we 
trace its course by actual events instead of trying to argue 
about it in loyalty to some preconceived conclusion. In 
Russia today, for instance, the standard of living is neces- 
sarily very low. This is not due to misgovernment nor to 
communism, nor to any of the things to which we might 
wish to attribute it, but to the fact that Russia is building up 


a machine civilization with the scanty resources of an agri- 
cultural civilization. Readers will not accuse me, I trust, of 
having leanings toward communism. I believe most pro- 
foundly in capitalism, and if Russia could have borrowed 
sufficient capital to finance this tremendous undertaking, it 
would not be necessary for her masses to go without neces- 
sities, so that her five-year plan and her ten-year plan might 
be carried out. But Russia could not borrow. If she were to 
have modern mills and mines, if she were to become 
equipped to produce a high standard of living, she would 
have to raise the capital from her own people; and the only 
way that the Russian people could raise this capital was 
through depriving themselves, or through being deprived, of 
almost everything excepting the absolute necessities of life. 
If these plans were to be carried out, the Russian people 
must sell much wheat which they might wish to consume, 
and live most frugally on black bread. They must export 
huge quantities of lumber to capitalist countries, because 
capitalist countries had money enough to buy it, although 
the Russian masses were putting up with terrible housing 
conditions and needed this lumber far more desperately 
than did the people who would eventually make use of it. 
Russia, in fact, had to sell everything which she could pos- 
sibly do without, and for which she could possibly find a 
market, and then buy in return, not things which her desti- 
tute masses might eagerly wish to consume, but machinery 
and factories and technical assistance, by means of which, 
eventually, the Russian masses might produce comforts and 
luxuries for themselves. If the Russian industrial program 
should succeed, however, the deprivation which caused it to 
succeed must stop. Machinery is not an end. It is a means 
to an end. The end is the satisfaction of human wants. 

Machine industry in America arrived by a somewhat dif- 
ferent route; but it arrived, nevertheless, through the depri- 


vation of the masses, and through their learning to live fru- 
gally while they were building up great industrial enter- 
prises. To be sure, there was no five-year plan or ten-year 
plan or fifty-year plan. Each individual, in fact, was expected 
to do his own planning, but the exigencies of economic law 
could not be escaped. We could not have factories unless we 
could raise the capital, and we raised the necessary capital 
through putting our money in the banks. The banks then 
loaned it to business men, who used it to buy machinery and 
to pay wages, in enterprises designed to give some sort of 
human service perhaps to produce some necessity of life by 
more efficient methods than it had ever been produced 
before, and for which, therefore, a ready market could be 
found, perhaps to produce some comforts and luxuries which 
people had never been able to enjoy before. Quite as likely 
the money would be used, not to produce anything for direct 
consumption by individuals, but to produce something 
needed by other business enterprises in the equipment of 
other factories and a still further development of the 
machine civilization. 

Eventually, by this process, America made the grade from 
an agricultural to an industrial society. Farming went on, 
of course, but farmers no longer got their whole living 
directly from the farms which they tilled, but more and more 
through raising things to sell to the industrial population, 
and using the money to buy things which industry had dis- 
covered such efficient methods of producing that it was no 
longer practical to try to make them on the farm. Larger and 
larger industrial units were developed, employing greater 
and greater sums of capital. Every improvement, every new 
invention had to be capitalized. Wages, for instance, had to 
be paid, and business enterprises had to raise the wherewithal 
to pay them long before they could make any profits for 
themselves. Obviously, if people generally spent their money 


as fast as they got it if they used it all up in riotous living 
instead of putting some part of it in the bank there would 
not be any surplus money available for the financing of 
further enterprises. Bankers, then, were eminently sensible 
when they advocated thrift. 

But presently one of the strangest events of human his- 
tory happened. It was so strange, so out of line with anything 
that people had ever dreamed of, that few, if any, were able 
to look the fact in the face. By this financing of production 
and by the discovery and application of more and more 
efficient methods which it made possible, industry was even- 
tually perfected to a point which made it absolutely neces- 
sary for the masses to spend their money freely and to un- 
learn their previous habits of thrift. Saving was as necessary 
as ever; but a new way of saving had now been developed, 
and it was such an efficient way of saving that the old way 
was no longer practical. The new way, in fact, demanded 
that the old way be abandoned. 

The great business need now was to keep the machine 
going, and it could be kept going only if its products were 
sold. They could be sold, however, only if they were bought, 
and the machine was so productive that it was necessary 
for the masses generally to buy and buy abundantly. The 
masses were willing. There was not the slightest doubt of 
that. All they lacked was buying power. They had, to be 
sure, more cash coming in than the masses of any civiliza- 
tion had ever had before. But they did not have enough. 
They were in the same fix now that would-be producers were 
in a generation and two generations before. They needed 
credit. It was, although the bankers did not know it, the 
greatest credit crisis of the times. 

If the capitalists of America had only understood capi- 
talism, they might have met this new emergency by an ade- 
quate financing of consumption until wages could be raised 


and employment stabilized in harmony with the increased 
productivity of the industrial mechanism. But these capital- 
ists had not studied capitalism. They had studied only its 
first stages. At a time when more buying was the need of the 
hour, they were still calling upon the masses to refrain from 
buying goods, and to invest their savings in still more pro- 
duction; and when industries languished for want of cus- 
tomers, they advised reducing wages, a process which must 
result in a further falling off of sales. 

Fortunately, there were other influences at work. Adver- 
tising, for instance, had become a fine art, and even business 
men who advised thrift as a general principle did their best 
to lure the public away from all such ideals. Mass produc- 
tion, also, had increased wages and added billions of dollars 
to the nation's buying power; and billions of dollars of credit 
was extended to consumers -by an astonishing extension of 
the installment system. 

From the average conservative banker's point of view, this 
installment system was quite unsound. It must result, they 
said, in millions of workers spending more than their total 
income and thus "mortgaging their future." This was inter- 
esting; for the banks were dealing largely with business men 
who were planning to build factories, buy machinery and 
hire workers, although they did not at the time have a suf- 
ficient income to enable them to do so, but who did so, with 
the bank's most hearty cooperation, by the simple process 
of mortgaging the future of these contemplated enterprises. 

The installment system, makeshift though it may have 
been, proved to be very profitable. It resulted in the sale of 
billions of dollars' worth of goods annually, which could not 
otherwise have been sold, and in several years, at least, of 
prosperity which America could not otherwise have had. 
Millions of workers undoubtedly purchased millions of 
things which they could not afford to purchase, judging the 


transactions by all the former standards of thrift; but be- 
cause these millions did buy these things, millions were kept 
employed in making them. These installment purchases not 
only provided them with things which they wanted, but pro- 
vided them with employment and with the means to pay 
for these and many other things. 

This lesson, however, seems to have been lost upon the 
average conservative financier. At any rate, there was no 
systematic effort to extend credit to the masses. There was a 
tremendous effort, in fact, to induce the masses to buy less 
goods and to invest their savings in stocks. The effort suc- 
ceeded; and the prosperity which had been produced so 
largely because millions of people had been buying things 
which they seemingly could not afford to buy was destroyed 
very largely because millions of people now bought secur- 
ities which it seemed that they could afford to buy. 

This may seem mysterious, but it is not. We must remem- 
ber that the average traditionally minded financier had not 
studied capitalism as a process, but had familiarized himself, 
rather, with one particular phase of the process the phase 
in which the direct financing of production was most vitally 
necessary. When he urged the masses to be thrifty and to live 
within their incomes, it was with no suggestion that they 
should spend their lives in poverty. It was with the idea, 
rather, that they should better themselves by investing their 
savings and drawing either interest or dividends, instead of 
having to depend forever upon the wages which they might 
receive from week to week. Many of these financiers had 
once been wage-workers themselves; and working for wages, 
they knew by experience, did not bring in much money. 
That the time would ever come when business could no 
longer prosper unless wage-workers did have lots of money 
seems never to have occurred to them. But such a time had 
to come and it came. It was necessary now, not only that 


wage-workers have lots of money but that they should spend 
it directly for things which they wanted to use and enjoy, 
instead of investing it in enterprise for the making of things. 

Electric refrigeration, for instance, had proven to be a 
profitable business. The pioneers in this field had become 
successful and were enlarging their plants, and many new 
concerns, egged on by bankers, had entered the field. 
Practically all the wealthy people of America had already 
equipped their houses with modern refrigeration, and people 
of more limited means were doing the same. If all these new 
companies were to succeed, however, or if the business was 
to justify the investment of such an amount of capital as was 
now being proposed, the masses must begin to install mod- 
ern refrigeration; and if the masses were to buy these new 
refrigerators, they simply could not buy shares in all these 
promising new companies. - 

The stock market, remember, was booming. It was break- 
ing all records. Fortunes were being made, apparently, in a 
day. Everybody might not be speculating, but nearly every- 
body was acquainted with somebody who was getting rich 
quickly, without having to work. Consider the case, then, of 
the family with two hundred dollars and a dilapidated ice- 
box, contemplating the purchase of an electric refrigerator. 
Consider several million such cases. 

They are wage-working families. They would much pre- 
fer to be capitalist families. But they are sensible, sane folks, 
and they know that they are dependent for their very living 
upon their jobs. They wouldn't think of quitting work and 
becoming gamblers; but this two hundred dollars is theirs 
is it not? and even if they should lose it, it will not be 
long, they think, before they can save another two hundred 
dollars and buy that refrigerator. But they do not intend to 
lose it. They will be very careful as to what stocks they buy. 
They will get the advice of a good banker. Of course, he 


will not advise them to buy on margin. But, if he runs true 
to form, he will advise them to invest the two hundred 
dollars, instead of spending it for some luxury like electric 
refrigeration, when two hundred dollars is all that they have. 
And so, instead of buying something which they might use 
and enjoy, they become two hundred dollar capitalists. They 
still have their dilapidated ice-box, say, but they own a two 
hundred dollar interest in some electric refrigeration com- 

Now, if there were only one such family, this might be a 
farsighted thing to do. But there were several million; and 
when the millions bought stocks instead of buying goods, 
two things had to happen. First, stocks went up. With such 
a great new demand for them, they soared as they had never 
soared before. And since the time to buy stocks, apparently, 
is when they are going up, more and more people bought 
stocks and stocks continued to rise. Of course they bought on 
margin, whatever advice to the contrary they might have 
received. When people can get rich in a week, why wait 

The second inevitable result was that plants manufactur- 
ing electric refrigerators and other things had plenty of cap- 
ital for expansion. They expanded, but the sales of electric 
refrigerators and other things did not expand in proportion. 
In many cases they shrunk, for too many millions of people 
had decided to deprive themselves temporarily of things 
which they wanted, so that they might have money enough 
eventually to buy everything imaginable. 

And when sales shrunk, profits shrunk, and employees had 
to be laid off. And when employees were laid off, they had 
to quit buying, not merely things which they had been plan- 
ning to buy but the things which they had been in the habit 
of buying regularly. The result of that, inevitably, was that 
the manufacturers of these things had to lay off employees. 


There was widespread unemployment even before the crash 
of the stock market. With the crash, and with the realization 
that business, after all, can not sell more than the people 
buy, there was such a retrenchment that unemployment 
became acute. I am not contending, of course, that this was 
the only cause of the business depression of 1929. But it is 
obvious that mass production demands mass buying of goods; 
and that if the masses of wage-earners gamble in stocks 
instead of buying the things which they want, they gamble 
not merely with their savings but with their jobs. It is a 
game, moreover, in which they are certain to lose. 

Now it doesn't follow that saving isn't wise. It is not only 
wise but necessary. But when we once see the whole business 
process, instead of becoming absorbed in some temporary 
aspect of it, we must see that there are times when the best 
way to save money is to spend it; and that capitalizing pro- 
duction when we should be capitalizing consumption not 
only deprives us of comforts and luxuries but upsets the 
whole social order and defeats the whole purpose of saving. 

I have already shown how mass production, for business 
reasons, insists upon enlarging the masses' buying power, 
through making wages higher and higher and prices lower 
and lower. But this is not enough, at least not until mass 
production becomes general. Wage scales, for instance, can 
not be revised daily; and while it is necessary to raise wages 
as higher productivity is achieved, it is hardly to be expected 
that employers will always maintain the proper balance. It is 
absurd to talk of limiting production to the existing state of 
the market, as so many financiers are constantly suggesting; 
for even those employers who intend to do so can not keep 
from discovering better methods which inevitably increase 
production, and from applying these methods when they are 
found. This thing, therefore, which is called overproduction 
is natural and inescapable. Production can not be halted so 


that buying may catch up, first, because modern production 
is based upon fact-finding and fact-finding can not be halted; 
and, secondly, because, when production slows down, there 
is less employment, and buying necessarily slows down. 

While it is human nature, however, for the business man 
to increase production, raising wages does not come quite so 
natural to him. Here, then, is the great need for financial 
leadership and guidance not a new financial system, but a 
perfection of financial practice so that it will meet the needs 
of the times. Modern merchants, with nation-wide organi- 
zations, can not trust all customers individually after the 
manner of the old-fashioned country store. But just as it was 
once necessary for the old-fashioned storekeeper to extend 
credit to the sick and unfortunate, and to tide them over to 
better times when they might be able to pay their bills, it 
has now become necessary for an organized, nation-wide 
financial system to see to it that some temporary industrial 
dislocation does not result in such a lessening of buying that 
the whole industrial system is eventually upset. 

It will be asked, of course, upon what security could 
consumer credit be issued upon a large enough scale to do 
any good. The answer is: the best security in the world the 
security of orderly business progress. In the early days of 
capitalism, manufacturers had great difficulty in obtaining 
capital; for by long experience, money could be safely lent 
in large amounts only when secured by large holdings of 
land. But that was because machine industry was new. Even- 
tually it was recognized that a good industrial idea in the 
hands of good industrial executives justified the lending of 
funds which were almost beyond the imagination of the 
ancient financiers. 

The time has now come when business progress, and even 
business safety, depend principally upon the orderly main- 
tenance of a high and ever higher standard of living, that 


is, upon adequate buying by the masses; and these times 
demand credit for the masses as surely as the times ever 
demanded adequate credit for business enterprise. And as 
the times are making these new demands, signs are not want- 
ing that the masses are entitled to be trusted. The entirely 
unexpected success of installment buying is just one illustra- 
tion. Born of the desperate necessity of business to sell more 
things, even though it was supposed to be unwise for the 
buyers to buy them, the buyers in the main met their in- 
stallments, and the credit extended to them was not abused. 
They were able to do this, however, only because the credit 
was extended. It was this which permitted them, not only to 
buy what they wanted, but to keep industry going and thus 
to keep themselves employed. 

Perhaps an even better illustration is the almost phenom- 
enal rise of the credit unions in America, and their phe- 
nomenal stability at the time of the great financial crash 
when so many great banks succumbed. These credit unions 
were motivated at first mainly by the desire of workers to 
rid themselves of the necessity of going to loan sharks, when 
sickness, unemployment or other emergencies made it neces- 
sary for them to negotiate small loans. Each member of each 
union paid dues, often not more then twenty-five cents a 
week, and thus contributed to a fund which the organiza- 
tion loaned, apparently without security, to members who 
needed loans. The loans, however, were secured. They were 
secured by the character of the average workers of America in 
the industries or other social groups in which the unions 
were organized, and by the character of the American indus- 
trial civilization. That civilization has a job for everybody 
if too many people do not go without the things they need. 
Heretofore, however, we have seen this truth only in a one- 
sided way. We have noticed that people could not supply 
their wants because they were unemployed. We neglected to 


notice that they were unemployed because they were not 
supplying their wants. Those were the days in which our 
financial thinking began, and usually ended, with the pro- 
ducer. Now we have discovered the consumer. When that 
discovery gets into the thinking of our financiers, credit for 
the masses will become a fact. Financiers then will no longer 
suggest that production be limited to consumption but will 
see production wholly in terms of supplying human needs. 
And they will no longer suggest that wages be lowered; they 
will withhold credit, rather, from employers who either from 
failure to understand what wages are, or through failure to 
adopt methods which would enable them to pay high wages, 
persist in keeping wages dangerously low. 



EPIDEMICS of unemployment are due to bad thinking, 
particularly upon the part of business men, and are 
as preventable as yellow fever and smallpox. Unemployment 
can be conquered; but it can be conquered only in the way 
that these plagues were conquered by breaking from tra- 
ditional notions, or superstitions, and finding out exactly 
what the trouble is. 

There is the notion, for instance, that employment comes 
from employers. It is on a par with the notion that milk 
comes from milkmen, or that water comes from faucets and 
money comes from banks. 

These notions are all true, but inadequate. It is similarly 
true, but similarly inadequate, to declare that yellow fever 
happened because of our failure to observe God's law. We 
assumed that we knew the law and tried to exterminate 
witches. When we found out what the law actually was, we 
went to exterminating mosquitoes and solved the problem. 

Employers, like faucets and banks and milkmen, are im- 
portant factors in this machine civilization. We couldn't get 
along without them, and it is to everybody's interest that 
they shall do effectively whatever they are designed to do. 
But employers do not originate employment. Employment is 
originated by human wants. It is only because people want 
things that employers can organize employment; and only if 
people buy things, can this organized employment be con- 

Equally confusing is the supposition that what the unem- 
ployed want is work. The unemployed, if we would only 
stop to think of it, are people. They are human beings, and 



what they want is what we human beings want. If we can 
get that through working, well and good; and if we can get 
it in sufficient measure without too much distasteful drudg- 
ery, we may be willing and even eager to work, and many 
of us may find our work a joy. But we do not want work 
for work's sake. What we want is results. 

Every little while, in the midst of every unemployment 
crisis, some disillusioned soul arises to state that people are 
unemployed because they do not want to work. Said disil- 
lusioned soul has experimented, and he knows. He has hired 
some one from the bread line, perhaps, out of the goodness 
of his heart, for half the wages which the unemployed one 
had been accustomed to getting, and has expected him to be 
on duty ten or twelve hours a day. The recipient of this 
bounty, however, is not a bit thankful. He does what he does 
grudgingly, and often leaves undone almost everything 
which he possibly can. The chances are, in fact, that this 
employee is almost as mistaken as his employer. But not 
quite; for he knew all the time that work for work's sake 
was not exactly what he wanted, while his employer is just 
finding it out. 

There are workers, no doubt, who do work simply from 
force of habit and, in the eyes of some, are therefore ac- 
counted industrious. But these should be numbered among 
the wrecks, instead of among the successes, of our industrial 
system. They remind one of the mine mule which, after 
twenty years of service on a windlass underground, was 
humanely turned out to pasture to enjoy a "well-earned 
rest," and to do whatever it is a mule wants to do. But this 
mule was so inured to discipline that he had forgotten what 
a mule wants to do. He had forgotten how to rest. Every 
morning at seven, instead, he faithfully took his position 
beside an old stump in the pasture and industriously 
wobbled in painful circles about that stump, until the 


whistle blew at night. Doubtless many human imaginations 
have similarly been wrecked by toil. We should be glad, 
however, instead of being shocked, to find that their num- 
ber is very small. 

The superstition that labor is a virtue and leisure a vice 
hangs heavy over our thinking today. "Satan," we are told, 
"finds work for idle hands to do." Even child labor is de- 
fended on the ground that it keeps children out of mischief; 
and many heavy-minded moralists view the approaching six- 
hour day and the five-day week with alarm. Business men 
themselves are likely to add to this confusion by emphasizing 
the unwillingness of the unemployed to accept jobs upon 
any terms, as to wages and hours, which shortsighted em- 
ployers would like to force upon them. 

The workers themselves, perhaps, are not more enlight- 
ened; but being human beings, fortunately, they prefer 
leisure to toil, and they would rather have wages so high that 
they will not be forced to work incessantly for a mere living. 
The human nature of the workers, therefore, tends to pro- 
tect even these shortsighted employers from their own short- 
sightedness; for if workers would work for next to nothing, 
they would certainly be able to buy next to nothing; and 
their employers, being able to sell next to nothing, would 
very soon cease to be employers. 

If this were only understood, there would be no unem- 
ployment problem. It could not be understood, however, 
until the advent of mass production. It was known, of course, 
that good business depended upon a good market; but the 
market was supposed to be an arbitrary force altogether 
beyond human control. 

It remained for mass production to discover that the mar- 
ket was composed of people for whom it could do some- 
thing. Mass production, in fact, could make markets, while 
the most that the old form of production could hope to do 


was to find them. Markets could be made in two ways. First, 
by putting as low a price as possible upon everything pro- 
duced, and then by giving as high wages as possible to every- 
body employed. 

In doing this, mass production not only made markets for 
itself but markets for other organizations which did not 
know enough to set low prices on their products. People who 
bought mass production products had more money left with 
which to buy things which were not made by mass pro- 
duction, and the proprietors of these latter establishments 
reasoned for a while that it wasn't necessary for them to go 
into mass production too; or at least that it would not be 
necessary for them to charge low prices. 

But only for a while. As the successes of mass production 
were demonstrated, the concerns, which did not go in under- 
standingly for mass production methods, began to fall be- 
hind. Sometimes they made the mistake of simply adopting 
large-scale production, without making prices lower or with- 
out introducing the economies which would enable them to 
make prices lower. Sometimes great mergers were formed, 
not for the purpose of building up a larger market through 
giving better values for less money, but to take advantage 
of the larger markets which had been built up by mass 

So unemployment returned, and those who had not fol- 
lowed mass production understandingly began once more to 
advance the ancient reasons for it. Some of them said that 
the standard of living had been too high, and that the masses 
should now be reconciled to living more simply. In other 
words, they proposed to cure unemployment through buying 
fewer things which people are employed to make. 

The people, by this logic, might give up riding in auto- 
mobiles, throwing some four million workers out of work 
in America alone; and the four million, then without wages, 


must necessarily give up buying most of the things which 
they had customarily been buying, and throw more millions 
out of work. Nevertheless, such a proposal would be per- 
fectly logical if what people want is toil. 

Eventually, by such a process, practically all the factories 
and business organizations must close down; but instead of 
being really out of work, everyone would suddenly find 
himself compelled to work harder than ever. All that we 
would be out of would be results. For we should all be look- 
ing desperately for food: and since we could no longer look 
to business organizations to supply our wants, we should be 
forced to get our food and other necessities in one of two 
ways: either by taking them forcibly from others or by squat- 
ting on the land, as our ancestors did, and feeding and 
clothing ourselves as best we could. Either course would 
provide plenty of work for all concerned, but the results 
would be anything but satisfactory. 

Others supposedly leading business men among them 
advanced the same idea in rather different words. They said 
that the trouble was "overproduction," and that business 
must now unite upon some plan to limit production to the 
market demands. In other words, the people, because of un- 
employment, are buying less than before; therefore we 
should increase unemployment so that they must buy even 
less than now. Only some fundamental superstition can 
account for such a proposal as that. 

Perhaps the commonest cry of the traditional thinkers was 
that mass production, through making it possible for one 
man to do as much work as ten, perhaps, had customarily 
been doing, was forcing the masses out of work. Once again, 
they imagined that what the masses wanted was work for 
work's sake, and they proposed to keep the masses working 
by arranging things so that the labor of each worker would 
be less effective. 


Even well-intentioned, humanitarian employers sometimes 
succumbed to this kind of thinking. To keep their whole 
force employed, they said, was now their object; and conse- 
quently they often postponed the introduction of better 
methods in their factories which they thought must result 
in the laying off of men. By failure to adopt these better 
methods, of course, they were unable to make their prices 
as low as they might have made them. Fewer people, there- 
fore, were able to buy their products, and those who did buy 
them had less money left than they would otherwise have 
had with which to purchase other things and thus give em- 
ployment to workers in other industries. The result was that 
the humanitarian employer had to lay off men eventually; 
whereas, if he had introduced the better methods, he would 
not only have built up his own business but would have 
built up business and employment generally. 

Two other proposals for the solution of the unemploy- 
ment problem are the result of somewhat better reasoning; 
but the reasoning is still so often tinged with superstition 
that the proposals, if enacted, might easily result in bitter 
disappointment. One is unemployment insurance. The other 
is the shortening of the workday for the purpose of dividing 
such jobs as there are among those who are looking for work. 
Before I discuss them, I think I should confess to two per- 
sonal prejudices. 

As a business man, I have seen such good results flowing 
from the shortening of the workday, that it was fairly easy 
for me to become prejudiced in its favor; and as a student 
of European conditions, I have seen such disastrous results 
flowing from the so-called "dole" to the unemployed, that I 
developed a pronounced prejudice against the whole idea of 
the political government undertaking unemployment insur- 
ance. But prejudice is not fact-finding; and the prejudices of 


a person who believes in fact-finding are no safer guides than 
are any other prejudices. 

I have been compelled to admit, then, after substituting 
research for opinion, that the shorter workday, while increas- 
ingly necessary for good business, can not by itself solve the 
unemployment problem. On the other hand, I have been 
forced to adopt a radically different attitude toward unem- 
ployment insurance. 

We say carelessly in times of widespread unemployment 
that "work is scarce"; and it seems plausible, therefore, to 
think of rationing the work much as, if food were scarce, we 
would ration the food. In this, however, our minds are likely 
to stumble over terms, for what people want is not work 
but the results of work. If, on the other hand, we think of 
work as things to be done so that we may get the results 
desired, it is misleading to say that work is scarce; for in such 
periods, obviously, there is no end of things to be done, the 
trouble being simply that we are not organized to do them. 
The real question, then, is: Will this dividing up of the jobs 
which have not yet been interrupted hasten the organization 
of the things that need to be done, so that there shall be 
profitable employment for everybody? 

This has nothing to do, it must be kept in mind, with the 
wisdom or non-wisdom of so dividing up the jobs in an 
emergency. The step may be very wise, from the standpoint 
of keeping one's organization intact, or it may be impera- 
tive as a matter of plain humanity. But we are considering 
now the effect upon unemployment. Would a general adop- 
tion of the four-hour day, for instance, by providing a job 
for everybody, help materially to bring back good times? 

There is no certainty that it would. It might even have 
an opposite effect. There is only one thing that can make 
good times good for everybody, and that is a wealth- 


producing mechanism which is producing and distributing 
to the masses the things which the masses want. In so far as a 
shorter workday will help industry do that, it will help solve 
the problem which we all want solved. If it will not do that, 
it leaves the problem much as it was before or even makes it 

We are rather familiar by this time with the general busi- 
ness necessity for a shorter workday. Mass production, which 
is the most effective form of production, can not live unless 
the masses can and do buy in adequate quantities. The 
masses can not buy adequately unless they are provided with 
adequate buying power, and will not buy adequately unless 
they have adequate leisure in which to play the part of 
consumers. Mass production, therefore, for necessary busi- 
ness reasons, constantly puts wages up, puts prices down and 
provides more and more leisure for its employees. But how 
does it do this? It does it in the only way that it can be done 
by increasing production. It does it by eliminating the 
wastes involved in former methods, by discovering better 
and better ways of getting goods to consumers, and by so 
reducing the costs of production and distribution that prices 
may be reduced and a larger number of consumers, there- 
fore, enabled to secure the things they want. 

Would an arbitrary reduction of hours, for the purpose of 
dividing up the work, have this result? Would it increase 
the general efficiency of the machine? Would it cut the costs 
of production? Would it offer further opportunities to re- 
duce prices and would it result in such an increased volume 
of buying that there would be more profitable employment 
for all? 

Much as I favor the shorter workday, I am reluctantly 
compelled to admit that such halving of the workday, unless 
accompanied by such an increase in production that wages 
could be raised, would necessitate their being reduced, and 


would thus so reduce the buying power of the masses that 
there would be still less employment to be divided up. 

I am aware, of course, that the formerly unemployed, now 
blessed with half a day's pay, would spend that half; and 
while those who were formerly employed on full time would 
spend much less than before, the total of dollars spent in 
buying might perceptibly increase. But would more things 
be bought? That would depend chiefly upon whether or not 
prices were lowered, and that would depend chiefly upon 
whether production costs were lowered. 

Employing more men to do the work, which fewer men 
are now doing, would not, in itself, surely, lessen the cost of 
production. There is every reason to believe that it would 
increase this cost and, by increasing prices to the customer, 
result in less buying, which would still further restrict pro- 

Some, I know, will not agree with me in this, and some 
may be in doubt and think that the best way to prove the 
contention would be to try it out. But such an appeal to 
eventualities is not quite so simple as it seems, for if such a 
reduction of the workday should result in less buying, the 
situation could not be easily corrected. Regardless of what 
produces less buying, it is clear that less buying always pro- 
duces less employment, less income to the masses, therefore 
still less buying and less and less employment. Before we try 
experiments on a nation-wide scale, it is well to make sure 
first that they do not land us in a vicious circle. 

The cure for unemployment, obviously, does not lie in 
sharing the work which we are now doing, but in organizing 
the production and distribution of more wealth. There are 
two ways in which this can be done; but they both involve 
the use of the most economical methods of production and 
the distribution and selling of the product at the lowest pos- 
sible price. 


One way is through the organization of new industries. 
The possibilities in this direction may be grasped by con- 
templating the automobile industry, now directly or indi- 
rectly giving work to four million or more Americans who 
might be unemployed if this industry had not been de- 

We commonly speak of "technological unemployment" 
(that is, unemployment caused by improved machinery and 
improved processes) as though it were something to dread, 
but it is technological unemployment which makes all better 
employment possible. The automobile industry could not 
have happened before it did. It could not have been devel- 
oped if there had been no available man-power, and man- 
power was available for its development because the discov- 
ery of better methods had released man from the necessity of 
spending all his time and energy in getting a bare living. 
He could now do new things; and one of the things that he 
did do, with his new-found time and energy, was to build 
up this highly desirable new method of transportation. He 
was able to do it, of course, only because he had good leader- 
ship. Ford led the way. He proved that men released from 
the old drudgery did not have to be left unemployed but 
could be employed by the millions supplying wants to which 
they could never have given attention before. Every new 
industry has proved this. They become possible only as bet- 
ter methods do put people out of work. Technological unem- 
ployment, then, is not a curse but an opportunity. The curse 
lies in our bad thinking. It lies in the fact that, with so many 
demonstrations before us, we do not see our opportunity. 
Because, for ages, man had to spend all his time and energies 
in getting a bare subsistence, we think that, when he does 
not have to do so, there is nothing left for him to do. As a 
matter of fact, his opportunities are limited only by his 
wants. There are plenty of things which man wants done, 


and therefore there are plenty of opportunities to employ 
man-power. The only thing that is lacking is enough sound 
business thinking to provide the leadership, and the actual 
organization of this employment. 

When we survey the field of man's wants, however, we 
do not have to wait to organize new industries. Man doubt- 
less wants television and fool-proof flying machines and thou- 
sands of things which he can hardly describe to himself as 
yet. It may be a long time, however, before we can fill his 
wants in these respects, even if technological unemployment 
has released an ample supply of labor. Years and years of 
research may be necessary in these fields before we can get 
around to the large-scale hiring of men. But, regardless of 
new industries, there are limitless opportunities in the re- 
organization of familiar industries so that they will supply 
the wants of the masses instead of catering to relatively few. 
All that is needed is the application of the technique of mass 

At the very height of unemployment in America, for in- 
stance, while no one wanted work for work's sake, millions 
were eager to own good homes. The business of producing 
homes, however, was not at all good, although the up-to-date 
automobile industry stood up amazingly. Was this because 
the masses cared so much more for automobiles than they 
did for homes? There is nothing to prove that it was. It was 
apparent, however, that automobiles were produced by mass 
production and were being sold at the lowest price which 
the adoption of the very latest machine methods made it pos- 
sible to charge; whereas houses were still produced by much 
the same methods which had been employed for centuries, 
and were so costly that relatively few were able to own one 
which really gave satisfaction. 

The same might be said of a thousand other things which 
people wanted but which, because of their price, they could 


not buy. Business offices, of necessity, were supplied with 
typewriters, but schools and homes generally were not. This 
was not because people preferred the painful, old longhand 
methods, but because typewriters generally cost from fifty 
dollars up and had not yet appealed to the market which 
could have been reached with a twenty-five dollar machine, 
providing it were of as good value and as serviceable in the 
typewriter field as a Ford or Chevrolet in the realm of the 

The trouble, it must be remembered, was not that the 
typewriter industry was making too much profit. Its profits 
would have been enormously greater than they were if it had 
been producing high-quality, low-cost typewriters for the 
masses; but because it did not engage in such mass produc- 
tion, it was not giving one-fifth as much value in material 
and work, per dollar of price, as were the manufacturers of 
Fords and Chevrolets. 

The same was true of the household furniture industry. 
It was possible to get good furniture at high prices and cheap 
furniture at low prices, but it was not possible for the masses 
to get the kind of furniture they wanted at the prices which 
they could afford to pay. Mere large-scale production could 
not give them that. It would require a thorough application 
of the principles of mass production production for the 
masses with the central thought of getting to the masses the 
best possible values at the lowest possible price, and pro- 
viding the masses with the greatest possible buying power 
and, therefore, the power to give the most employment. 

One of the great expenses of the masses, and one of the 
great drains upon the consumer's dollar, has long been the 
cost of household repairs; but this simple service was not 
organized in any scientific, mass production way. If anything 
went wrong with one's automobile, one could make an im- 
mediate inexpensive repair with a replacement part, or one 


could notify a garage and have it corrected; but if things 
went wrong in one's house, one might have to deal with a 
dozen little businesses, each doing business in a limited and 
most expensive way, and the total cost for all the going and 
coming and other unnecessary labor involved was likely so 
to wreck the consumer's dollar that he could not give em- 
ployment by buying other things he wanted eagerly to buy. 

It is not necessary to continue the list of services which 
business was not rendering because of its failure to organize 
the labor of those who were no longer needed in their for- 
mer employment to do other things which needed to be 
done. It is enough to say that there was large-scale unem- 
ployment, not because better methods in industry had made 
man-power available, but because business did not utilize 
the man-power so released, in spite of the demonstration 
that business success was now unlikely in any other way. In a 
word, the business depression was due, not to mass produc- 
tion, but to the fact that, in a mass production age, seventy- 
five per cent of even American business was still attempting 
to function according to an obsolete theory of what busi- 
ness is. 

It was said that there was overproduction; but everybody 
knew better. What had happened was simply that a way 
had been discovered to produce more than business, by fol- 
lowing its old methods, could sell. Due to such mass pro- 
duction as there was, prices had not increased during the 
previous period of prosperity; but due to our failure to un- 
derstand the principles of mass production, prices in general 
had not been lowered as rapidly as the cost of production 
had been lowered, and there came a time, therefore, when 
the masses could not buy the things which they had been 
employed in making. 

The lowering of production costs, instead of causing busi- 
ness to see the necessity of cutting prices to the limit, and 


thus passing the advantages of the new methods on to the 
consumer, caused business to see an opportunity to get a 
larger immediate profit on the things it had to sell. That 
chance for greater immediate profits attracted speculation; 
and all America, for a season, went into a mad dream of get- 
ting rich without giving any service in return. The inevi- 
table, therefore, happened. Consumption was not financed to 
keep pace with production, and production had to come 
down to the level of consumption. The paper profits, there- 
fore, vanished. Because American business did not see the 
true meaning of mass production, it lost the greater total 
profits which it might have made, and the American people 
lost the power to employ each other. 

Unemployment, however, is not a mere mistake which we 
can charge to profit and loss, telling ourselves that it must 
not happen again. It is rather like war. It is a desperate emer- 
gency out of which anything may happen, even the violent 
overthrow of the institutions which make progress possible. 
It is a conflagration which, when once started, may consume 
the good with the bad. For the unemployed are human 
beings who can not wait for long processes of readjustment. 
Staying alive has suddenly become the imminent need, and 
such considerations as human progress and social stability 
are relegated to second place. It is because of this situation 
that the nations of Europe have adopted unemployment in- 
surance, and not with any illusion that such state aid will 
really solve the problems involved. 

And it is because of this same fact that America, if faced 
with continued and widespread unemployment, will act in 
the same way, regardless of how business men may protest 
or how economists may view with alarm. America will do 
this, once given the conditions under which it must be done, 
even though it may be generally admitted that the dole in 
Europe has largely proved itself a failure. One clutches at 


straws when drowning, no matter who proves that straws are 
not worth clutching; and unless business itself makes definite 
provision for the care of the unemployed, the unemployed 
will see to it that some social agency does. It is foolish to talk 
of Americans being immune from socialist or communist or 
revolutionary propaganda. If they have not been affected by 
it, it is only because conditions in America have not been 
favorable to its spread. But Americans by the millions will 
not readily lie down and die. In the face of widespread and 
continued unemployment, no masses on earth will be less 

The ideal solution, of course, would be for the business 
leaders of America to get together and publicly accept the 
responsibility for unemployment, pledging themselves that 
hereafter, whatever else happens, they will guarantee to or- 
ganize employment for all who are willing to work. That, I 
believe, will be done in time, but it is perhaps futile to speak 
of it now. It is surely not Utopian to say that the persons 
most competent to organize employment anywhere should 
be the employers, and if they can not do it, it is hard to see 
how mayors and governors and congressmen can. But the 
bulk of our business is still in the hands of traditional think- 
ers, and these traditional thinkers do not yet think of busi- 
ness as involving this responsibility. 

What, then, of unemployment insurance? Business men, 
generally, are likely to oppose it; but, if the situation is par- 
ticularly desperate, this opposition will be futile. It was this 
which caused me, and may cause many other business men, 
to take a different view of the whole problem. Opposing 
the inevitable is not a program which can appeal to any 
business man. 

A number of American industries have successfully intro- 
duced unemployment insurance. Some of these have found 
it working so successfully that they consider it an asset, rather 


than an expense, to the business. That is not saying that all 
businesses could do the same, but it gives a ray of hope. 
Many others could do this, although if all who could do it 
were to install such a system immediately, it would not end 
unemployment. Unemployment, as we said at the beginning, 
is due to bad thinking, especially bad business thinking. It 
is due to the failure of business men to run business success- 
fully, and to understand that profits come from organizing 
the community's man-power to make something which 
masses of people want and to get it to the masses at a price 
which the masses can and will readily pay. 

It is unsuccessful business, then, which fails to give em- 
ployment. If employment is not provided, however, the 
state can and undoubtedly will provide for the unemployed, 
and it will tax business in general to procure the necessary 
revenue. This may seem unfair, but there is no way by which 
unemployment can be made to seem fair. It is not only un- 
fair to the unemployed, but it is unfair to clear-thinking 
business men that is, to those who are constantly creating 
employment to have their business constantly menaced by 
unemployment which is constantly being created by those 
who will not think. 

It seems to me, then, that wise business men, instead of 
wasting their energy in a die-hard campaign against the 
"dole," will face the facts, accept some sort of state unem- 
ployment insurance as inevitable, and bend their efforts 
toward securing legislation designed to do the greatest 
amount of good and the least amount of harm. My sugges- 
tion is that they work for an Unemployment Insurance Act 
which will give employers the option of taking out state in- 
surance or of developing an insurance system in their own 
establishments which will grant benefits equal in every way 
to those granted by the state. 

The first result of such legislation would doubtless be that 


many businesses, probably a majority, would not have the 
initiative and clear vision necessary for the inauguration of 
a successful unemployment insurance system of their own 
and would become insured by the state; but the better, more 
successful and more farsighted employers would undertake 
to insure their own employees against unemployment. In 
both groups, the cost of unemployment would be high; but 
among the state-insured, an individual employer could do 
little to bring down the cost, while an employer who ac- 
cepted personal responsibility for the care of his unemployed 
would make it a first matter of business to prevent unem- 
ployment within his organization. He would make war on 
waste to save insurance costs; and if he adopted the best 
methods of eliminating waste, he would be able so to reduce 
prices that the increased demand would enable him to re- 
employ his force. Or he would devote himself to finding new 
things to be done and organizing his available man-power, 
as rapidly as it is released from other work, to do those things 

Under state insurance, employers would have no such in- 
centive, for even those who did organize new employment 
would still have to pay for the unemployment caused by 
those who did not. The tendency, then, we may be sure, 
would be for employers, as fast as they woke up to the real 
situation, to discard the state insurance and undertake the 
responsibility themselves. 

And that is about all that is needed for a solution of the 
unemployment problem. When all employers wake up and 
accept their responsibility, the problem will be solved. And 
those who do not wake up in such a situation will soon 
cease to be employers. 

State insurance, then, with its subsidy for unemployment, 
would gradually fade out of the picture. It might remain 
on the statute books, but it would do no harm, for industry 


would at last be in the hands of employers who have learned 
how to prevent unemployment and have accepted their re- 
sponsibility for doing so. 

Traditional thinkers may shrink from such a solution. 
They may sincerely wish that unemployment might be 
abolished, but they do not want to pay the price. For the 
price is heavy; it consists of changing our minds and being 
willing to act according to things as they are. 

Under the ancient formula business had no social respon- 
sibility. In times of prosperity employers employed, and 
when hard times came, they ceased to give employment. The 
idea that it was the responsibility of business to create good 
times did not occur, either to the traditional business man or 
to his traditional critic. The business man, however, was 
rising to power, and he liked that. Power without responsi- 
bility seemed to be his aim; and it became the aim of many 
to see that he did not get it. Monopoly became a dread word. 
That business, particularly Big Business, should have its own 
way was a thought which caused millions to shudder. 

Now it is time for all of us to change our minds. Not be- 
cause business men have become good, but because it has 
been discovered that business can succeed only as it creates 
success for everybody. The greatest total profits can now 
come only from the greatest total service. There must not 
only be jobs for everybody but actual wealth-producing jobs 
jobs that shall not merely distribute existing wealth, but 
successfully distribute the ever-increasing volume of wealth 
which better machinery and better methods constantly make 

If business once organizes to do this, the old bugaboos 
must vanish. No one need worry then about the greater and 
greater power which it may attain. "More power to business" 
will be the universal prayer: but not more power to busi- 
ness men who have not yet learned what business actually is. 



NO ONE needs to be reminded that times are changing, 
whatever disagreement there may be as to the char- 
acter of the change which is taking place. To the majority, 
probably, the change has no discernible character. They do 
not see a change, but many changes, and the changes which 
they observe do not seem to have any particular relation to 
each other. 

What has mass production, for instance, to do with a be- 
lief in hell? Mass production, to be sure, was coming in at 
about the same time that the general belief in eternal pun- 
ishment was going out; but one can not argue from this that 
the emergence of one of these ideas must have crowded the 
other out. Personally, I have reached the conclusion that 
there is a vital relationship between these two seemingly 
irrelevant happenings, and I shall state my reasons in another 
chapter. Just now I want to guard my readers from assuming 
that there must be a direct cause-and-effect relationship be- 
tween any two events simply because they happen to occur 
in succession. 

We are compelled to admit, however, that the world we 
have been living in has been changing on almost every front. 
Not only have our ways of doing business changed, but our 
home and family life has changed, our religious concepts 
and our moral standards have changed. Our very tastes in 
literature and art have changed. We are not only reading 
new books but new kinds of books; and we are standing in 
awe, not merely before magnificent buildings which we 
never saw before, but before buildings the like of which no 
one ever saw before. 


We commonly speak of the great change which has come 
over the younger generation, ignoring the fact that grand- 
mothers have changed quite as much as their grand- 
daughters have. We speak of the modernist clergyman as a 
new type of religious leader, forgetting that the fundamen- 
talist, broadcasting by radio, or arriving at his appointments 
by aeroplane, is quite as new a type. The fact is that all of us 
have changed. We've had to. Some of us may sigh for the old 
times, but none of us can live in them. We may even hitch 
up the old horse for an old-fashioned sleigh ride, but we can 
not have an old-fashioned sleigh ride on highways that are 
full of automobiles. What we shall have is likely to be a 
perilous new adventure. 

Most of the changes which have given us the greatest shock 
seem to date from the period of the World War, and many 
have been accustomed to blame the war for all the changes 
that have taken place. Their position is hardly tenable. 
The war did not bring about the automobile. It may have 
hastened the development of the aeroplane, but the aero- 
plane came first. That the war had much to do, even, with 
the new attitude toward sex is a thesis very hard to prove. 
It was not responsible for Freud or for psychoanalysis, or 
for the teachings of Charles Darwin who died many years 
before the war broke out, although the teachings of Freud 
and of Darwin have had much to do with the new intellec- 
tual and moral and religious concepts of today. 

Has there been any fundamental change in human devel- 
opment by which all these other changes may be explained? 
I am convinced that there has; but I am a business man, not 
a philosopher, and I want my observations to be treated 
only as the observations of a layman, for I make no pre- 
tense of having made a systematic study of history or anthro- 
pology or sociology. Most of my life, in fact, has been spent 
in retail stores, and in studying retail distribution. My latest 


book was devoted strictly to those studies, and contained 
nothing whatever about the abolition of poverty or the new 
attitude toward morals and religion and world peace. But 
one can not study anything thoroughly without discovering 
something of its relation to other things; and if I learned 
about living from business, instead of from a more conven- 
tional and academic approach, the things I learned, if im- 
portant, must be taken into account even by those whose 
field of research has been much wider than my own. 

It was one of the great disappointments of my life that, at 
twenty-one, after passing my entrance examinations to Har- 
vard, I was unable to enter and was compelled by my father's 
illness to continue in business instead. I compensated, how- 
ever, as best I could, by studying the problems which came 
before me daily; always trying, if I could, to discover the un- 
derlying facts, and never being quite content to meet them 
merely in the way in which they were customarily met. In 
other words, I was not satisfied with "learning the ropes" of 
business. I was curious to know the why of every rope, and I 
constantly wondered if some other rope might not serve the 
purpose better, or even if it might not be served by some- 
thing other than a rope. I even went so far in time as to try 
to find out what business is for; and when I discovered that, 
it made me curious about a lot of things which had not at 
first seemed to be within the business realm at all. 

The purpose of business, I discovered, was to serve people, 
not merely to support the business man concerned in it. I 
was not an idealist. I wanted profits. I even had a strong 
preference for becoming rich. Nevertheless, this discovery 
of what business really is did strange things to me. It made 
me want to serve. It made me look for my profits thereafter 
as a measure of the service that I could give. And this atti- 
tude, in turn, compelled me to observe the whole problem of 


human relations in a way in which I had never observed it 


I became interested in the masses, and in what they 
wanted, and in how they ever came to want it. People were 
selfish, I reflected, and yet they were not selfish. Everyone 
seemed to be looking out for somebody not himself usually 
for some relatives. How did it ever come about, I wondered, 
that people generally were as interested in their blood rela- 
tions as they were in themselves? Then I began to see the 
family as an institution, and to wonder what the world was 
like before there were families which seemed forever to be 
making selfish folks unselfish, at least as far as a few loved 
ones were concerned. 

I never did find out how the institution of the family ever 
came into existence, or who invented it, or exactly what 
human life was like before there were families. But I did 
discover the purpose of the family. I discovered that it was 
an economic institution, that its primary purpose was to 
serve its members, to make it possible to bring the babies to 
maturity and meanwhile to "bring them up" so that they 
would be something more than foraging animals. 

And what a difference the family madel Eventually, 
because of this institution, human beings developed co- 
operation and loyalty and what we know as human love, and 
they also developed arts and crafts and education, and lan- 
guage and literature and romance, even morals and philoso- 
phy and religion. 

The problem of how business came into the world likewise 
fascinated me. It started, I learned, with barter between 
families. It had a low beginning apparently. It had no moral 
code. It wasn't even honest. Whatever tender feelings one 
had, or whatever conscience one had, was pretty well lim- 
ited to one's own relations. Outsiders didn't matter. Each 


family was independent and got its living out of the piece of 
land on which it squatted. If it could get the best of a neigh- 
boring family by trade or pillage, why not? 

Only experience could answer that question. If it was 
advantageous to trade one's family surplus in one line for 
some other family's surplus in some other line, it might be 
advantageous to do it again and again; but the process could 
not be repeated indefinitely unless there was some code of 
honesty involved. So people learned to trade generally with 
near-by families, and to develop an intercourse which led to 
small-community life, reserving their cheating and robbing 
for more distant families or "aliens." 

But trade was advantageous and it expanded. In time it 
became necessary to enforce some code even between these 
distant and utterly alien communities. So political states 
came into being, and the theory and practice of imperialism. 
Wars resulted, of course, when rival powers clashed, and 
they were greater wars than the world had ever known be- 
fore. But peace resulted too peace within the borders of 
each successful state and larger areas of peace than the 
world had known before. The state also was an economic 
institution, and its purpose was to serve the people, even 
though the man at its head was likely not to know it. One 
of its results, however, was patriotism, which caused selfish 
human beings, without any change whatever in the laws gov- 
erning human nature, to become unselfish in ways in which 
they had never been unselfish before. It caused them some- 
times, even, to leave their own families practically unpro- 
tected, and to go out willingly to die for their country. 

In one particularly interesting era of history, only a cen- 
tury and a half ago, people suddenly began to change again. 
All sorts of new ideas got abroad. New economic ideas. New 
political ideas. New social and moral ideas, new ways even 
of looking upon love and marriage. There was a war at this 


time, also, a most peculiar war. It was called the French 
Revolution, and it became fashionable to blame that war for 
all the changes that one did not happen to like. Neverthe- 
less, there was a new thrill in the air, even in England where 
the government was not overthrown, and in all the countries 
which were adopting machine production. 

We know now that this great change was not caused by the 
French Revolution, but that the French Revolution was just 
a part of it. It was caused by the coming of the machine, 
by the building of factories, by the advent of a new eco- 
nomic institution. We are accustomed now to speak of the 
change as the Industrial Revolution. 

This new factory system could not live unless it could ex- 
pand, and it could not expand unless it could hire workers. 
It was, however, a more efficient and a more profitable way 
of producing the things which people wanted than the sys- 
tem which was in vogue; and whenever anything like that 
comes into the human picture, it seems almost certain that 
the system in vogue will eventually give way. 

The masses, under the system in vogue, were attached to 
the estates of the great ruling families. They had families of 
their own, and their condition was not exactly that of slaves. 
They had no right to leave these great estates, however, but 
existed from generation to generation as dependents and 
serfs. Everybody was accustomed to the arrangement, and the 
masses themselves, where they were well treated, did not 
rebel. They were thoroughly drilled, in fact, to an acceptance 
of their lot and looked upon the feudal lords as their pro- 
tectors. If there was to be a change, a lot of traditional think- 
ing would have to be undermined. 

It was. "Liberty, Equality and Fraternity" now became 
the slogan. Not "Factory Production"; very few would have 
been inspired by that. But it was Factory Production which 
demanded that feudalism must go, and human life obedi- 


ently reached out for democracy. It might be a feudal lord, 
to be sure, who did the reaching at times; and it might be an 
army of serfs who captured him and carried him to jail for 
his attack upon the institution which kept them in serfdom. 
But the new factory system, nevertheless, just had to free the 
serfs whether they were in any mood to be freed or not, and 
the serfs were eventually freed. The rites were attended, to 
be sure, by all sorts of strange excesses; and the revolution, 
when it was over, did not result in Liberty, Equality and 
Fraternity. But it did result in the factory system, and in 
strange, new ways of looking at all sorts of things which did 
not seem to be connected with the factory system at all. 

The factory system brought no heaven upon earth. It 
brought, in fact, several different varieties of hell. It trans- 
ferred the serfs from their- wretched position in a world 
which everybody understood and threw them into a wretched 
new position in a world which nobody understood. The 
masses gained a lot of new rights, but they lost the right to 
live, for staying alive now depended upon finding employ- 
ment and, under the new conditions, there were frequent 
long and bitter periods of unemployment. If the world had 
been told in advance just what the factory system was like, 
and just wherein it differed from the system with which the 
world had been acquainted, a lot of the resulting abuses 
might have been avoided. But nobody knew what the fac- 
tory system was like. No world had ever operated under such 
a system before; and what people tried to do with the fac- 
tory system they tried to do with minds which had been 
molded by feudalism. 

Nevertheless, the factory system muddled along. It ex- 
panded because it had to expand. Factories could make 
things faster and in greater quantity than things could be 
made before, and these things were made to sell. If they 
weren't sold, in fact, the factories would be compelled to 


close and the owners of the factories would probably be 
forced into bankruptcy. 

So things were sold on a scale the world had never known 
before, and that meant that more people had more things 
than ever before. In other words, the standard of living, in 
spite of all the abuses of capitalism, was raised from decade 
to decade and from generation to generation. The capitalists 
may have had no such intention. They may have been think- 
ing only of what they themselves could get. But it was neces- 
sary, nevertheless, that they get more goods to more people 
constantly, whether the people showed any disposition to 
buy those goods or not. 

If they had understood this principle, world history would 
have taken a far different course than it did. But one can not 
blame them for not understanding it, when such an under- 
standing never dawned even upon the economists of the 
period, who devoted their lives to a study of the new eco- 
nomic system. 

But the capitalists did not have to be told to get busy 
selling goods. They recognized that necessity, and they em- 
ployed every means at hand to help them sell. Whether they 
employed fraud or not, or to what degree they employed it, 
depended usually not upon how good they were, but upon 
what the law allowed. Good men, obviously, could not per- 
mit bad men to undersell them, if they expected to remain 
in business at all. So the pace was set by the bad, and fol- 
lowed by the good, it being generally understood that ex- 
ploitation pays. 

It did not pay, of course, to cheat one's immediate neigh- 
bors. Besides, the law did not allow it. But capitalism, in its 
desperate necessity to sell more and more goods, got to look- 
ing for markets and for raw materials everywhere, and world 
trade became a great factor in the affairs of all the capitalist 
countries. But there was no world government and no world 


law. Exploiting weaker nations became the rule, and the 
stronger nations clashed with each other in their scramble 
to exploit the weak. 

No wonder there was war. Peace, it was soon discovered, 
could be maintained only by a balance of power between the 
larger competitors, and that balance of power was frequently 
upset. Eventually the whole impossible situation exploded in 
the greatest war of human history. The World War did not 
cause the world change which we have lately been noting. It 
was, rather, one of the phenomena of that change, just as 
the French Revolution was a phenomenon of the First In- 
dustrial Revolution. 

The First Industrial Revolution is simply a name for the 
period in which the factory system started. By the Second 
Industrial Revolution I the period in which it has 
been reaching its maturity. The period, perhaps, can not be 
sharply marked, but its character, nevertheless, can be de- 
fined. This is the dawn of industrial consciousness. Business 
does not yet understand itself, but it is beginning to do so. In 
so far as it acts upon certain principles which have recently 
been discovered, it is successful; and in so far as it fails to act 
upon those principles, it fails. These principles are the prin- 
ciples of mass production: in other words, production for 
the masses. 

We can not distinguish between the old and the new capi- 
talism by saying that one gives service whereas the other did 
not. Business has always given service to someone; and it has 
given some sort of service, often, even to those whom it 
robbed and cheated and exploited. It is the discovery that it 
pays to give service, and that it pays best to give the greatest 
possible service to the greatest possible number, which is now 
not only revolutionizing business but revolutionizing the 
whole world in which we live. Just as the institution of the 
family developed most of the human qualities which we have 


come to hold most precious, and just as the institution of the 
state developed patriotism and a wider human consciousness, 
this new order of business is developing a more inclusive 
loyalty, a sense of the oneness of all humanity, and is already 
making human selfishness function unselfishly for the com- 
mon good on a world-wide scale. 

World peace is no longer a dream to be realized in that 
far-off future when human nature shall no longer be bound 
by the laws which govern it. Nor is it a precarious advantage 
to be temporarily gained from diplomatic bargaining. World 
peace is the logical destiny of the Second Industrial Revolu- 
tion, and not a cold, negative, hands-off peace, either, but a 
peace sustained and made permanent by all-round human 
understanding and experience with enlightened selfishness. 

But how did selfish capitalism, with thought only for the 
immediate profits it might obtain, ever come to make such 
a discovery as this? 

That is an all-important question. If it can not be an- 
swered, then the whole meaning of the Second Industrial 
Revolution will escape us. Philosophers knew thousands of 
years ago that peace was better than war. Great religious 
leaders also enjoined the world against hatred and greed and 
lust. That we should love our neighbors is no new idea by 
any means. Nor, even, is it a new practice. The members of 
the old patriarchal family, when the family was the going 
economic institution, did learn to love and to be loyal to 
each other. The citizens of the state likewise learned to be 
loyal to the state, and to give their lives, if necessary, for this 
larger human group. What is new is the discovery that the 
machinery of modern business does make the whole world 
one, that we are "all members one of another," that no indi- 
vidual and no group can be independent of others, but that 
we are mutually dependent and must, if we are to give ex- 
pression to our very will to live, go in with all our heart for 


mutual service. And this was discovered, not because busi- 
ness men were good (it seems, even, on looking back, that 
business men were pretty bad) , but because it was the truth, 
and because business, whether business men realized it or 
not, could be successful only as it tried to find the truth. 

Power machinery, which gave rise to the factory system, 
was a discovery of science. It was a creature of fact-finding. 
It either worked or it didn't work; and if it didn't work, it 
didn't do any good whatever to get down beside it and pray. 
One got down beside it, instead, and found out what was 
the matter with it, if one could. 

That, in itself, developed a new attitude toward wealth 
production. Before the era of power machinery, people cus- 
tomarily looked to the land for the production of the things 
they needed, and if the land didn't work for lack of rain, 
they customarily did get down and pray. Then it rained 
sometimes; often enough, at least, to sustain the practice. 
The practice, however, was of no use in industry. Fact- 
finding was the only industrial principle which got results. 

People generally, to be sure, did not become scientists. 
Even those who looked for facts when a machine broke down 
did not necessarily look for facts when a man broke down, 
or when the market broke down. In such events, it was cus- 
tomary to curse the man and to pray with all possible op- 
timism for better times. This attitude, in fact, has not been 
entirely abandoned yet. In the main, however, the practice 
of fact-finding grew, and the practice of magic waned. If 
fact-finding had not been more successful than magic, I 
hardly think this would have been so. 

The drift from magic to science was discouragingly slow, 
as the scientists saw it, but it was discouragingly fast from 
the standpoint of those who were dealing in magic. At any 
rate, there was such a drift, and in the course of a century 
or so, fact-finding not only had a place in all industrial estab- 


lishments but was securing a toe-hold in the life of the aver- 
age man and this too in spite of many powerful influences 
against it. 

Even in school (and this is more or less true still) students 
were not encouraged to find the answers to problems. They 
were generally told the answers and given to understand that 
any other answer was sinful. To be sure, science had proved 
that the earth is round, and the schools informed the chil- 
dren that the earth is round; but they did not encourage a 
questioning attitude in the matter, and the net result upon 
the growth of the child's mind was much the same as if he 
had been told that the earth was flat. 

In industry, however, it was more and more necessary to 
find correct answers, and the practice of fact-finding gradu- 
ally encroached upon the realm of inherited opinions. Even 
workers who discovered that a machine was not as good as it 
might be, and demonstrated some way by which it could be 
improved, were often rewarded instead of scolded for their 
impudence. In the end, some employers (and they turned 
out to be the most successful ones) completely abandoned 
the whole idea of running business by fixed opinion and in- 
sisted that it be managed according to the facts instead. 

That is how mass production happened. That is how it 
happened to be discovered that exploitation does not pay. 
That is why the most successful employers began to raise 
wages, and to make prices as low as possible, although the 
practices were contrary to all the traditions of business and 
to all existing economic theory. And that is why it has now 
become evident that business, to be successful, must serve the 
masses, and not merely the masses within its own boundaries, 
but throughout the whole buying world. 

A business revolution, however, can not be confined to 
business. A business revolution is a revolution in basic hu- 
man relations; and all human living is therefore, of necessity, 


affected. As in the First Industrial Revolution, then, human 
life is once again changing on every front. If human life is 
changing now, however, more than it has changed at any 
other period in human history, the fact need not confuse us, 
for the basic change is a change from tradition to fact-find- 
ing; and no matter what our objectives may be, we are now 
coming to understand that we can not reach them excepting 
as we face and follow the facts. 

We may be sure that human nature is not changing. It has 
been charged against science by those who did not grasp its 
technique that "it gives us nothing to cling to," but those 
who do grasp its technique know better. It does give us some- 
thing substantial to cling to. It is those who believe in 
miracles whose minds are forever at sea. Scientists may not 
have found all the facts, and they may not be able as yet to 
interpret those which they have found; but they have a fixed 
faith which the believer in miracles can not have, that all 
the facts, discovered and to be discovered, will prove to be in 
harmony with unchangeable natural law. To know the law, 
then, becomes their great objective; and they can not swerve 
from this objective because they can not doubt that there is 
a law. 

Primitive man, when he observed a change in the weather, 
believed that God had changed. An earthquake was an ex- 
hibition of divine rage, and even a big wind an indication 
that the Ruler of the Universe was out of sorts. That there 
was any unchangeable law governing natural phenomena, a 
law which human beings might discover and upon whose 
workings they might depend, was beyond his comprehension. 
Modern man, however, by analyzing the facts of lightning, 
has discovered something about its nature; and because he 
knows how electricity acts, he has made it serve him in a 
thousand ways. 

Human nature, we may now be equally certain, is un- 


changeable. It is what it is and under no circumstances will 
it ever act contrary to the law which governs it. There is 
every indication that it is selfish. If so, we may be reasonably 
certain that it will not become angelic. If it were susceptible 
to such changes, in fact, we could not hope to do anything 
with it. It is because it is what it is, and because of the possi- 
bility of our finding out what its laws are, that we can have 
any such hope. If the laws of electricity were susceptible to 
change, we could not depend upon our electric appliances; 
and if human nature were likely to change, we could not 
hope to build a dependable human society. 

Under certain conditions, however, human nature acts in 
one way; and under other conditions, it acts very differently. 
Everybody wants to live; and if conditions are such, or are 
supposed to be such, that we can live only by fighting or 
exploiting other human beings, it seems certain that we will 
engage in war and exploitation. If, on the other hand, it is 
apparent that we can not live excepting as we engage in 
some form of cooperation, human beings may be depended 
upon to cooperate. 

Heretofore, whenever we have longed to create a better 
world, we have thought it necessary first to change human 
nature; but no matter how many movements we started, or 
how many people subscribed to them, the world we longed 
for never happened. All Western civilization, in fact, was 
induced to subscribe religiously to the principle of universal 
love, but universal love did not happen; and even if we did 
love others, it furnished no guarantee that we would treat 
them decently. We might even put them to death by slow 
torture, in the hope of saving their souls from the fiends 
which caused them to disagree with opinions and conclusions 
which we considered sacred. 

The great meaning of the Second Industrial Revolution is 
that it inaugurates selfish, actual, factual cooperation, not 


in accordance with some theory of what man should be, but 
in accordance with what man really is. 

Business men want profits; and it is mass production 
which yields the greatest total profits. Workers want the 
highest possible wages, and this most profitable, because 
most economical, method of production not only pays the 
highest wages but finds it necessary for selfish business rea- 
sons to do so. The whole world wants peace, and this new 
organization of industry makes world peace necessary. People 
generally want rest from drudgery, and mass production 
eliminates drudgery. But they also want security, and mass 
production can not be permanently successful unless it regu- 
lates both wages and employment so that the masses will be 
economically secure. They want leisure it is human nature 
that they should want it, and jt is socially necessary that they 
have it; but only mass production can provide this leisure, 
and it remains for mass production to discover the business 
necessity for doing so. 

It may be said in objection that the First Industrial Revo- 
lution did not carry out its promises, and that it is rather 
naive, to say the least, to hold such an optimistic attitude 
toward the Second. One might say as much, however, regard- 
ing the first automobile or the first aeroplane. Actually, the 
First and Second Industrial Revolutions are not two revolu- 
tions but one revolution, and it is only necessary to make the 
distinction because the term "the industrial revolution" has 
become attached to the initial stages of the greatest change 
in human history. It is naive to be optimistic. But it is 
equally naive to be pessimistic. Industry has no use for either 
attitude. Machine industry is based on science and can ad- 
vance only along the line of discovered facts. 

There were terrible excesses connected with the introduc- 
tion of machine industry. Man did not know, and could not 
then know, how he would have to act when, instead of being 


organized in little agricultural communities, he would find 
it necessary to make his living by the operation of machines 
which, in their very nature, could not supply him directly 
with the things he needed to eat and wear. Since machine 
industry rendered the old social order impossible, dreamers 
naturally dreamed of a new social order; but they did not 
dream of a machine order and did not think it necessary to 
discover the laws of the machine. Business men, on the other 
hand, did not do much dreaming. Competition, they found, 
was too keen to permit them to do anything of the sort. In 
the interest of more profits, however, they did discover more 
and more business facts; and it is from those business facts 
that a social order is now emerging which is in many ways 
beyond man's wildest dreams. 

In the First Industrial Revolution, business men, greedy 
for profits, seemed to stop at nothing to obtain them. They 
hired men as cheaply as they could get them, and men with 
families to support were compelled to work for next to 
nothing, and hence to provide those families with next to 
nothing. Next they hired women, because they would work 
more cheaply yet. Then little children. One recoils at the 
bare mention of the social degradation of the early stages of 
industrialism, the filth and squalor of the slums, the dan- 
gerous machinery in mines and factories, the accidents, dis- 
ease and general despair and then the smug excuses of 
employers that this was all God's will, and that they could 
not pay higher wages without losing the market to their 

Some charged all this to industrialism. Others charged it 
to cursed human greed. But both indictments were rather 
futile. The process of finding more profitable ways of doing 
things could not be stopped; and each new opportunity for 
profits always found somebody reaching out for it. When the 
state tried to regulate business, business bribed and cor- 


rupted the state. Workers organized unions; but union lead- 
ers, too, were often bribed, and although the unions played 
a large part in enforcing a higher standard of living, and 
therefore eventually more and better business, industrial 
societies seemed to be forever in the throes of social war. 
Various factions fought for their rights, but for all practical 
purposes, might seemed to be right, and no social problems 
were solved until fact-finding was substituted for fighting 
and it was discovered that the trouble lay neither with hu- 
man nature nor with the nature of machinery but with our 
business and our human ignorance. 



IT IS impossible to observe the advance of the machine 
civilization without coming face to face with the question 
of what is happening to the institution of the family. It is 
not for me to answer that question. I wish simply to point 
out that it can not be answered by debate. It is clearly a 
matter for fact-finding; and mere emotional reactions for or 
against change are not likely to bring us to any satisfactory 

Obviously, the home is not what it used to be. But it never 
was. The structure of the family has changed from age to 
age, and the code imposed upon its members has varied as 
economic conditions have varied. This is not to take issue 
with those who insist that the family is a holy institution. It 
is simply to point out that it is not a dead institution, and 
living things change. 

That the family has adjusted itself from time to time to 
economic changes is an incontrovertible fact; and that it will 
adjust itself to further economic changes may be expected. 
For the family, whatever else it may have been, has always 
been an economic institution. 

The classical economists, to be sure, had little or nothing 
to say about the economics of the family. This may seem 
strange, considering that the family, at this time and for 
thousands of years before, was the dominant institution of 
the world. It was the institution under which the great 
majority of human beings obtained their living; and it 
not only had a definite and understandable system of eco- 
nomics, but one which was humanly most interesting. But 
the classical economists seem to have overlooked the domi- 



nant economic system of the world and to have given their 
attention exclusively to the institution of trade. Trade cer- 
tainly needed to be studied. Although it was not so old an 
institution as the family, and not so important, it was an ever 
greater and greater force in human affairs; but this attempt 
to study it as something apart from human affairs must have 
resulted, as it did, in a very "dismal science." 

The study of the machine civilization from such an ap- 
proach must likewise be dismal. Many are attempting it, but 
their studies either begin and end with tables of car loadings 
and of broker's loans, or in a series of wails concerning 
"modern materialism" as opposed to the alleged spirituality 
of pre-industrial times. 

If we observe economics as an ever-changing technique 
in the matter of getting a living, we find it a most exciting 
study. We will then not only notice the economic practices 
of the family but perceive the relation between these prac- 
tices and a lot of human ideals which we may never have 
associated with economics before. 

Superficial observers of the machine civilization, for in- 
stance, may note that people have more things now than 
ever before, but that they are still unhappy. Because they 
have more things, they may then argue, they have become 
more materialistic; and if they could only become content 
with few things, as the ancients were, they might acquire 
calmness and strength and everything else, for that matter, 
with which it is possible for the human mind to endow its 
imaginary heroes. 

If, on the other hand, we are trying to observe the ever- 
changing processes by which human beings have organized 
and are still organizing to obtain a living, the patriarchal 
family will not loom up to us as a symbol of resignation to 
poverty. It will loom instead as a marvellous invention a 
means by which the standard of living was not only raised 


beyond anything that man could have hoped for before, but 
which made life so relatively secure that man was able to 
develop a spiritual life which he could not possibly have had 

From the standpoint of the machine civilization, to be 
sure, the people of the patriarchal order were poor; but from 
the standpoint of anything which had gone before, they were 
immensely rich. The family historically was as wealthy as it 
could be. It went in, not for poverty, but for luxury, and 
employed every available means to get it. It even made a 
virtue of work, and of diligence, not because strenuosity 
produced a pleasanter sensation than repose, but because 
work brought results and, if enough work were done under 
organized direction, people would then have an opportunity 
to rest with some sense of security. 

Many, to be sure, did become sluggards, but it was not 
the sluggards who succeeded under the economic regime of 
the family. The modern "go-getter," in fact, will find most 
of his "pep" slogans duplicated in the Proverbs of ancient 
Israel or in the Chinese classics. The family succeeded, not 
because it had achieved all that there was to be achieved, but 
because it was an up-and-coming institution. 

Its greatest achievement was that it made it possible to 
bring babies to maturity, and to bring them up with an un- 
derstanding of how this had become possible. Some may take 
issue with that statement. Some may say that the greatest 
achievement of the family was that it taught love and rever- 
ence and the principles of cooperation. But that is only say- 
ing the same thing in a different way, for if the family had 
failed to bring its babies to maturity, the race would never 
have known of these principles. It is not at all certain, in 
fact, that there would still be a human race, if it were not 
for what the institution of the family did to help it conquer 
its environment. 


The fundamental economic principle of the family was 
cooperation. Individual animals might get a living of a sort 
through individually finding fruits and berries, and indi- 
vidually killing and eating other animals. But land could 
not be tilled, and the art of agriculture could not be de- 
veloped, through any such free-lance methods. Human be- 
ings had to get together to do that. They had to coordinate 
their efforts. They had to make all sorts of experiments, and 
all sorts of failures; and when they found a method which 
actually worked, they had to make a note of it, so that the 
organization could follow that formula thereafter and not 
have to waste so much time and effort in discovering it anew 
each time. 

No doubt there were people in the early days of the fam- 
ily who did not think the garne was worth the candle. Con- 
ceding that the family organization brought more things to 
people than people had ever been able to enjoy before, was 
it not restricting their freedom and destroying their ancient 
ideals? There may even have been movements to return to 
the good old times when anybody who wanted to do so 
could start a little business with his own teeth and claws. 
If so, however, they died out, and they died out because the 
family system was more successful. 

The family was composed of producers and consumers. 
All were producers, of course, and all were consumers; but 
it was as consumers that they laid out their program of pro- 
duction. If the members of the family wanted a lot of things, 
they organized as well as they knew how to produce those 
things. If, upon occasion, however, they produced more food 
than they could consume, they did not act at all as the 
classical economists declared that human beings must act. 
They might curtail production along those particular lines, 
to be sure, but it never occurred to them that they must 
simultaneously curtail consumption. Before the advent of 


trade, at least, if a family produced more than it could 
consume, it consumed as much as it wanted to consume 

The institution of trade grew out of the institution of 
the family, but it did not follow the economic principles of 
the family. That is quite understandable. Trade was new. It 
had to find its way. Such education as there was in the 
world consisted of education in the traditions of the family, 
but the best educated patriarch was not prepared to see how 
these traditions could be applied to the family and to people 
outside the family too. 

Each member of the family was educated and disciplined 
to work, not according to his own personal whims, but in 
accordance with the family's main objectives. He might be 
as selfish as people ever were; but he was trained to see that 
he could become successful only if the whole family was 
successful, and to coordinate his own selfish efforts with the 
selfish efforts of all the others in the achievement of the 
common good. By such training, family loyalty, family rever- 
ence and family love were engendered. 

Trade was something else again. Trade came about be- 
cause families found themselves with certain surpluses in 
certain lines, while they were short, perhaps, of other things 
which they wanted to have. By trading these surpluses for 
the surpluses of other families, the problem seemed to be 
solved. It was, in a way, but the practice that was then 
started revolutionized the whole world, and the institution 
of the family could never be exactly what it was before. 

Trade was so profitable that it expanded; but people 
whose lives were thoroughly organized to serve their own 
families did not organize their lives to serve consumers. The 
family itself, so long as it had no dealings with the outside 
world, was organized definitely to serve consumers; but when 
a family attempted to sell its products to other families, it 


thought not at all of the consumer's interests but of the 
interests of the family which had the goods to sell. 

Nor can the families be blamed for this. The members of 
the family thought first of their own family's interests be- 
cause the family had taught them to do so. If human nature 
had been different than it was, perhaps, all the families in 
the world might have met in council and debated (i) Shall 
we now establish the institution of trade? and (2) Under 
what constitution and by-laws shall all the families in the 
world proceed to have dealings with all the other families 
in the world? But human nature and human history do not 
act that way. Families with surpluses simply tried to better 
their situation by trading with other families; and each very 
naturally "let the buyer beware." 

Trade, for many centuries, was but an incident in family 
life and did not disturb it very much. Based on the principle 
of trying to get the best of each other, however, trading 
often led to fighting, and the world of trade became known 
as an ugly and cruel world, and only within the orderly 
arrangement of the home (which was based upon a very 
different principle) could one look for peace and serenity. 

As families extended their tradings with near-by families, 
however, they found an orderly way to do it, and they de- 
veloped a small community life. But this, instead of ending 
trade wars, led to bigger wars than ever wars with other 
communities which had been similarly organized. Neverthe- 
less, trade, because it was profitable, expanded more and 
more; and the need for order along the far-flung trade routes 
called political states into being, with the result that, while 
there might be still larger areas of order than before, there 
were still larger wars wars with other states. 

All the time, it must be remembered, most of the people 
of earth were getting most of their living under the economic 
arrangement of the family; but they were getting enough 


of their living from an institution which was organized on 
diametrically opposite principles, so that it was constantly 
necessary for men to abandon their families and march out 
under state banners to kill unknown family men of other 

Which brings us down to very recent history; for, while 
trade has now become world-wide, and everybody is more or 
less dependent upon it, the majority of the earth's popula- 
tion is still probably getting most of its living, not by 
virtue of trade but under the old economic system of the 
family. If all commercial intercourse should come to a sud- 
den end today, all the world's population would not neces- 
sarily starve to death immediately. Most of the people in the 
United States would doubtless perish, for the family here 
is not equipped to wrest a living from the soil by its own 
unaided efforts; but in parts of Asia the institution of the 
family is still running so true to its original form that many 
might possibly survive. 

Such a prospect, however, can hardly appear pleasing, even 
to the most pronounced critics of modern machine civiliza- 
tion. This civilization has not been peaceful. It has been 
disturbing in many ways and it has undoubtedly weakened 
the economic supremacy of the family and set the whole 
world to living a large part of its life, not according to the 
law of cooperation but according to a dog-eat-dog, survival- 
of-the-fittest program. 

Many idealists who have shrunk from this reality have 
tried to introduce another system. They have tried to run 
their businesses, for instance, on what they have called a 
spirit of cooperation; and by profit-sharing and other de- 
vices, they have tried to imagine that they and their em- 
ployees "are just one happy family." Try as they might, 
however, they have not succeeded in turning a business 
into a family; for the family was a community of producers 


and consumers, who produced what they consumed and 
consumed what they produced. Businesses deal with the 
outside world; and when even the best regulated of families 
dealt with the world outside that family, it did not and 
could not deal with it by the same principles and with the 
same motives that made the family what it was. 

Only with the coming of mass production, in fact, could 
the economic principles upon which the family was organ- 
ized be applied to trade. Only then could the principle of 
bargaining be supplanted by the rule of service. For mass 
production is production for the masses. It demands, not 
merely large-scale cooperation in production, with hun- 
dreds of thousands of workers perhaps all engaged under 
scientific management in turning out a single product, but 
it demands more and more coordination between produc- 
tion and consumption. 

Under mass production, the economic laws which the 
classical economists thought they had discovered simply do 
not apply. Producers are no longer limited to finding mar- 
kets, but are compelled to concentrate upon the more 
human task of discovering human needs, and of organiz- 
ing production and distribution in strict accordance with 
those needs. Just as the family did not stop producing be- 
cause it could not sell its goods, mass production does not 
stop because the masses have no buying power. Mass pro- 
duction gets its goods to those who need them by manufac- 
turing and distributing buying power. 

Mass production, it must be remembered, is not a social 
theory resulting from some idealistic determination as to 
how things should be done. Mass production is already the 
dominant system of business and has resulted from dis- 
covering how things must be done if the greatest total 
profits are to be obtained. First thought must be given to 
the consumer and the masses must become large-scale con- 


sumers. Bargaining in the old sense is a thing of the past, 
for producers can no longer think of how much they can 
get from consumers but of how much they can serve the 
consumer for the least possible tax upon the consumer's 
dollar. Mass production likewise can not afford to hire its 
employees on the old bargaining basis; it must pay its 
employees as much as it can, and find out how it may 
pay them more so that they will be able to buy more of 
the increasing production. It can not live in the way that 
business once managed to live, by exploiting anyone, nor 
by taking such business as it may take from its competi- 
tors. It must find its success now in enriching everyone, 
and in constantly finding new ways of enriching them. 

What this will do to the organization and prestige of 
the family is a matter to which sociologists may well direct 
their studies. Undoubtedly, since the head of the family is 
no longer in control of the economic process through 
which the family may get its living, he must be relieved of 
many of the ancient responsibilities and therefore of many 
of the ancient prerogatives of the patriarch. Women, for 
instance, can no longer be his subjects; and even children 
are likely to discover that their economic well-being now 
comes not from the organization of the family but from 
the organization of industry, and they may look more and 
more for individual guidance, not to their fathers but to 
the truths which science is discovering. In one sense, how- 
ever, mass production represents the historical triumph 
of the family the triumph of the principle of organizing 
for common service over the principles upon which busi- 
ness tried to act and which the classical economists sup- 
posed were economic laws. 



POLITICAL government is government by opinion. 
Successful business management is government by 
the facts. 

Politicians must be guided by opinions. Engineers and 
business men must be guided by the facts. But these, un- 
fortunately, may be quite as confusing to engineers and 
business men as they are to the politicians. 

They may conclude, for instance, that a "business ad- 
ministration" can be obtained by electing engineers and 
business men to office. But engineers and business men 
in office are not engineers and business men: they are politi- 
cal officeholders, and if they intend to retain their offices, 
they must act like political officeholders. They must bow to 
public opinion, no matter how far from the facts public 
opinion may be. What is more, they are so unused to such 
bowing, that they may not do it either as gracefully or as 
effectively as the professional politicians do it. 

This seems to be the fundamental reason why so many 
business men, and so many scientists who have been accus- 
tomed to fact-finding methods, become disgusted with poli- 
tics and decide to let politics alone. But politics does not let 
them alone. Politics decides many of their most important 
questions. Politics makes tariffs. Politics declares war. Politics 
enacts all sorts of laws to curb business enterprise, not neces- 
sarily because the politicians want such laws passed, but 
because they want to keep their own political cheques in 

Because of all this, I have known many business men to 
declare that they can no longer believe in democracy. But 



this is rather a naive reaction, for autocracy is government 
by opinion quite as much as is democracy. Autocrats, even 
if they understand the principles of good goverment, are not 
free to follow them. They have to guard, not against mere 
political reverses, but against revolution; and they have to 
guess how to do that, instead of rinding out. Political govern- 
ment not only is government by opinion, but it must be. No 
measurement, at least, has yet been discovered to secure 
exact government by fact in politics. 

Mazzini defined democracy as "the progress of all through 
all under the leadership of the wisest and best." I know of 
no better definition, and no better political ideal. Neverthe- 
less, I can find nothing in the structure of politics which 
gives any assurance that the people will choose the best and 
wisest leadership. 

In the structure of business, however, the wisest and best 
leadership is actually being chosen by the people. 

That will seem to many to be a most amazing statement. 
For business, they will say, is not governed by opinion; the 
public does not elect its business leaders. Business leaders get 
to their positions of leadership, they will tell us, by virtue of 
their own initiative and courage, and their ability to dis- 
cover the real principles of business, instead of pandering 
to ignorance and prejudice. 

But this is not quite true. The masses of America have 
elected Henry Ford. They have elected General Motors. 
They have elected the General Electric Company, and Wool- 
worth's and all the other great industrial and business leaders 
of the day. They have not voted for them, to be sure, with 
paper ballots, and they have not instituted any system by 
which the masses shall assemble in solemn plebiscite, to 
guess about what their needs are likely to be, and to choose 
from a list of highly ballyhooed unknowns the men or the 
firms with which they pledge themselves to do business for 


the next year, or the next four years, as the case may be. No, 
this election of business leadership is constant. The polls are 
open every day, and voters vote when they feel like voting. 
They do not vote with ballots, but with dollars and quarters 
and dimes. They do not vote, moreover, upon what candi- 
dates promise that they will do in the future if they are given 
the authority to do it. They vote, in all cases, upon what the 
candidates have done, and they confer leadership upon a 
candidate only if what he has done has proven satisfactory. 

One of the most interesting of these matter-of-fact elec- 
tions (to be distinguished from the matter-of-opinion elec- 
tions on the political field) was the election of Henry Ford, 
not merely as the maker and distributor of motor cars but 
as the person who would have most to say, in the end, as to 
how American industry should henceforth be organized and 

When the polls opened in this "election," the American 
public had never heard of Ford. There were several candi- 
dates for high positions in the automobile industry; but it 
wasn't much of an industry and it was an industry in which 
the public wasn't particularly interested anyway. The in- 
dustry was manufacturing new toys for wealthy people; and 
if the American public had held a matter-of-opinion election 
on the subject, it might easily have voted for some candi- 
date who would promise to keep automobile owners from 
driving their cars on the public highways, where they were 
sure to scare horses and perhaps run down the common 

Had they heard of Ford, and had he tried to outline his 
program to them, they would certainly have done something 
to stop him, for his plans were as far as could be from all 
their fixed opinions. 

In the first place, the American public was set against the 
idea of one man's accumulating very much money. Farmers 


and workingmen particularly were certain that no one could 
accumulate as much as a million dollars honestly, and that, 
even if it were accumulated honestly, it necessarily left a 
million dollars less for other people to get. 

But here was Ford, planning a business which was even- 
tually to make him, not merely a millionaire, but a billion- 
aire, at the very time that the American public was insisting, 
in its state legislatures and in its national congress, upon 
curbing the trusts and making it impossible for Big Busi- 
ness to get the best of little businesses. He had a scheme, 
moreover, for mass production for producing millions and 
millions of these machines which were scaring horses and 
adding new terrors to walking and driving on the streets. 
He also had a program which would necessitate the ex- 
penditure of hundreds of millions of dollars for better roads, 
when almost every farmer in the country considered the 
road tax a terrible burden as it was. 

Unquestionably, in any matter-of-opinion campaign, Ford 
would never have been granted authority to do what he did. 
Incidentally, if he had been granted authority to do it, and 
had tried to do it under this authority, he couldn't possibly 
have done it. But it was all a matter of fact, not of opinion 
or of right, and Mr. Ford threw his hat into the matter-of- 
fact ring. It was necessary to appeal to the people; but it was 
not necessary to ask them to vote on any question which 
they could not possibly comprehend, nor to take a stand on 
anything but their own self-interest as tested by actual re- 

It was necessary for each candidate to make a car which 
the people would vote for, not with matter-of-opinion votes, 
but with matter-of-fact dollars. No one was compelled to vote 
if he wasn't interested. And just because one candidate got 
a working majority, that would not necessarily keep another 
one from getting a working minority. In this matter-of-fact 


voting, there was exact, scientific, matter-of-fact proportional 

In politics, if a Republican was elected, the Democrat 
was not only rejected, but those who voted for the Democrat 
had to be served by the Republican whether they liked the 
service or not. In business, the minority could go on being 
served in the way they chose to be served by the simple 
process of continuing to cast their dollars that way. The way 
of the most buying simply became the dominant way of 
doing business. If a minority leader copied it, he auto- 
matically became a majority leader. 

In this campaign for motor car supremacy, it was evident 
that everybody couldn't vote. Everybody might want an 
automobile, but very few could buy one, and only the dollars 
spent in actual buying counted. This, it may appear at 
first, was most undemocratic, for in politics every voter could 
vote on everything, whether he knew anything about it or 
not. The current issue might be the tariff; and it was doubt- 
ful, sometimes, whether the majority of the voters knew 
what a tariff was. But this was no bar. A voter might believe 
that the tariff was a building in Washington, and he might 
not care in the least whether it was high or low; but he could 
vote, nevertheless, for a high tariff because the candidate who 
favored it was an Elk, or because he lived up-state, or be- 
cause his opponent wore whiskers while he preferred men 
with a clean shave. It was not only his right, he was told, 
to vote on all these issues, but it was his duty as a sovereign 
citizen; and how he made up his mind was nobody's busi- 

As a rule, of course, the average voter was intelligent 
enough to know that he did not know enough to 
qualify him to decide such intricate questions. It was 
his opinion, however, that his party leaders knew enough 
to do so, and that they were much better men generally 


than the leaders of the other party. He did not know these 
party leaders, to be sure, but he had heard about them from 
speakers whom the party leaders had sent out for him to 
hear, or read about them in literature which the party 
leaders had sent out for him to read. 

Those voters who did not belong to parties had another 
formula. If times were good, they voted for the party which 
happened to be in power. If they were bad, they voted for 
the opposition. If times were very bad, large numbers of 
them voted for the most radical opposition. They could not 
always explain the relation between the hard times and the 
administration's policies, but they showed, at least, how they 
felt about it. 

In the matter of industrial leadership, while those who 
could not buy automobiles had nothing to say about who 
should be leader in that special field, everybody nevertheless 
did some voting. Everybody bought something, and how 
they bought determined how manufacturing and selling 
should be carried on. 

Undoubtedly, they had their prejudices. They wanted to 
get as much as they could for their money. There were move- 
ments, to be sure, from time to time, to persuade them 
against doing this, but these movements were not noticeably 

Sometimes an appeal was made to the public not to buy 
foreign goods. It was argued that European manufacturers 
paid low wages, and buying their products helped to keep 
wages low. But that campaign never got very far. The people 
were so selfish, as a rule, that they picked out what they con- 
sidered the best values. Perhaps they noticed, also, that em- 
ployers who wanted them to pay high prices were likely to 
be keeping wages as low as they could. 

There were also campaigns by labor unions to induce 
people to buy goods having the union label, and thus pat- 


ronize industries which paid high wages and recognized the 
rights of workingmen. Even the unions, in those days, be- 
lieved that high wages must lead to higher prices, and 
abandoned this belief, and the campaigning which was based 
upon it, only when it became apparent that higher prices so 
impaired the buying power of the workingman that his 
seemingly higher wages were of no more use to him than 
his lower wages had been, and were therefore not higher at 
all. At any rate, all attempts to induce people generally to 
pay more than they had to pay for things did not progress 
very well. 

Small town "independent" merchants often tried to rouse 
their communities against what they called the pernicious 
and unpatriotic practice of -buying at chain stores. There 
were other campaigns against mail order houses. But it was 
the agitators, not the chain stores nor the mail order houses, 
who almost invariably lost. In the commercial and in- 
dustrial field, people generally voted with their dollars, not 
according to some abstract economic principle which they 
did not understand, but according to their own selfish 
interests and the hard fact that they wanted a lot of things 
and had only a little money with which to get them. 

In the great campaign for automobile supremacy most of 
the candidates were of the opinion that they could get more 
dollars by appealing to the sort of person who had the largest 
number of dollars to spend. One firm, then, put out a 
$5,000 car, another one for $4,000, another a car for $3,500. 
Mr. Ford offered a car on an entirely different theory. He 
would not appeal, he decided, to the sort of person who had 
the most money, but to the greatest number of people who 
had money enough to buy a car at the lowest price for which 
a serviceable car could be manufactured and sold. 

Many were declaring at the time that wealth was con- 
centrating in the hands of a few. Mr. Ford, possibly, did not 


know whether it was or not. But if it were, it would not 
follow that the few would buy many cars. Every millionaire 
might buy one, or possibly two or three, but even then, there 
wouldn't be much of an automobile business. On the other 
hand, if he could sell cars to everybody who would like a 
car, and at a price which they were able to pay, he might 
build up a bigger business, and get more profits in the end, 
than those who had their eyes on the millionaire trade could 
possibly get. 

It was the opinion of the trade that no car which was of any 
use could be made and sold for $1,000 or less. It might be 
made at such a cost, it was admitted; but Ford, the wise 
ones said, had forgotten how much it costs to sell a car. 
Apparently, he had not; he had simply noticed how much it 
costs to sell a high-priced car. Because he made the price one 
which great numbers of people could pay, his cars almost 
sold themselves and he had more orders than he could fill. 
The $1,000 figure, it turned out, instead of being ridiculously 
low, was unsatisfactorily high to Mr. Ford. He dropped it 
immediately and constantly, while he constantly improved 
the product, with results which the whole world knows. 

He gave the world a new system of transportation. He 
made more money than any manufacturer had ever made 
before, and paid more and higher wages than had ever been 
paid. By making convenient, luxurious and fast travel 
available to the masses, he changed their whole way of living. 
He caused the people to spend billions upon billions of 
dollars for automobiles and roads to run them on, and to 
have more money after they had spent it than they had 
before, for he built up an industry in which 4,000,000 men 
were engaged under scientific direction and according to 
efficient fact-finding methods, in the creation of new wealth. 
He changed human society in more ways than it could 
possibly have been changed by any kind of political adminis- 


tration, and yet he did it, not merely with the approval of 
the masses who had been traditionally prejudiced against 
wealth, but with their day to day cooperation. 

Ford brought power to the masses as rapidly as they were 
able to use it. He gave them far more power than political 
democracy had ever been able to bring them, for while po- 
litical power might enable them to stop all sorts of things, 
motor power enabled them to do all sorts of things. It en- 
abled them to go where they wanted to go, to see the coun- 
try, to buy and sell in better markets, to get a broader view- 
point and lose some of their prejudices and, best of all, to 
aspire to still greater things. When one reflects upon what 
any political administration has done since the first of the 
century, or what any political party has done, and then con- 
trasts it with what the mass production and mass buying of 
automobiles has done, he may get some perspective of the 
true relation of political and industrial management. 

But mass production, he must remember, could only hap- 
pen from mass buying. The people have been ruling in the 
industries which they did not own, even where they have 
not always succeeded in ruling in the government which 
they did own. For in government, they expressed their 
opinions on matters which they could not possibly under- 
stand; and if the government was extravagant or even ridden 
with graft, they might either not know it, or be reminded 
that it was giving so many people "work" that the result on 
the whole might not be bad. 

But people who are given work, under mismanagement 
and graft, do not create new wealth, and the result to the 
public is only an additional burden. On the other hand, peo- 
ple engaged in doing things which the masses want to have 
done, and engaged in doing them in the most scientific and 
effective way in which they can be done, are helping the 
masses and enabling them to live a freer and fuller life. But 


the most scientific and effective way, we have discovered, is 
the way of mass production, which means the way of the 
lowest possible prices, the way of largest possible buying and 
of highest possible buying power. 

By voting for what they want, the masses may or may not 
achieve political democracy. When they buy what they want, 
however, upon terms which are most advantageous to them- 
selves, they are not merely electing their industrial govern- 
ment but constantly participating in it, and keeping it in 
tune with their own new needs. In the best sense of the 
word, then, mass production is democratic, for, to para- 
phrase Mazzini, it is government of all the users of things by 
all the users of things under the leadership of the wisest and 
best actual fact-finding system. 

If this were the sole contribution of modern industry to 
better government, the gain must be immediately recog- 
nized. Even if our political government does not always 
truly represent us, our industrial government must, as soon 
as business in general comes to understand that service to 
the consumer is the most successful business principle. And 
since our wealth and well-being are determined by the ad- 
ministration of things, so much more than they are by the 
administration of statutes, it might be argued that we can 
afford to forget politics and simply tend to business, in full 
assurance that social progress will result. 

Such reasoning, however, is faulty. If we really tend to 
business, in fact, we can not forget politics, for the first 
necessity of business is to guard and protect the consumer's 
dollar the dollar which must do all the buying from which 
all our business, all our manufacturing, all our employment, 
and all our wages, salaries and profits must come. Business, 
therefore, when it becomes fully conscious of business prin- 
ciples, can not tolerate anything which decreases that dol- 
lar's buying power. The reason we have had corrupt politics 


heretofore is because it has been tolerated, and chiefly be- 
cause business men have been so absorbed in what they con- 
sidered their own businesses, that they have found one 
excuse and another for leaving politics to politicians. When 
they once thoroughly grasp the true principles of business, 
however, and the business need of protecting the consumer's 
dollar, they can no more think of doing this than they 
could think of leaving burglary to burglars and racketeering 
to racketeers. 

The first effect of successful mass production, of course, 
must be to make the constitutional government stable, for 
voters are so prone to vote as they feel, that they are un- 
likely to overthrow any reasonably good government, or even 
any good current political administration, at any time when 
they are feeling prosperous. Since business demands stable 
government, however, and is utterly prostrated by political 
revolutions, business men in the past have been inclined to 
support existing governments, even if ineffective, and even 
to tolerate their known inefficiency and waste a course 
which has driven many earnest reformers to despair. That 
condition, however, must change when the underlying prin- 
ciples of mass production are once thoroughly understood. 
Business men will continue to oppose political revolutions, 
but not in the negative way in which they have opposed them 
in the past. They will concern themselves, rather, with the 
facts of revolutions, knowing that they never happen unless 
something wrong is happening to the consumer's dollar, and 
they will direct their energies to correcting that wrong. 

A house may be so dirty as to be almost uninhabitable, 
and it is perfectly natural, human nature being what it is, 
that sentimental conservatives should insist on putting up 
with it and that emotional radicals should favor burning it 
down. Fact-finders, however, need not take sides. They may 
take both sides, in fact, by cleaning house. 



THE only objection I have to the theories of socialism 
and of communism is that they are wrong. Many of 
my friends, however, object to them simply because they are 

Wrong theories may be corrected by the simple process 
of finding out what is wrong with them. What to do about 
hateful thories, however, I do not know, for hating a theory, 
whether it is right or wrong, seems to have no effect what- 
ever upon the theory. We may hate the theory that the 
world is round, or that man evolved from lower forms of 
animal life, or that the laws of the universe can not be sus- 
pended to permit miracles to happen in the place of natural 
phenomena. We may even fight these theories. We may pass 
laws against them. We may imprison and kill all those who 
dare to advocate them; but unless we find something wrong 
with the theories, the ultimate result seems to be that we, 
not the theories, become worn out. 

The only way to get rid of a wrong theory is to understand 
it. But this requires fact-finding, and those who are trem- 
bling in the throes of hatred are in a poor position to find 
and to recognize the facts. 

That socialism and communism are the result of class 
thinking will be accepted, I believe, by both friends and 
enemies. It might seem, then, that those who oppose social- 
ism and communism might begin by opposing class think- 
ing, but this is not likely to be the case. For those who 
oppose socialism and communism most violently are the vic- 
tims of class thinking quite as much as the socialists and 
communists are. What they seem to want is not the abolition 



of class thinking, but the abolition of working class thinking 
by the working class, and the retention of privileged class 
thinking by the privileged classes. As a matter of fact, if 
the masses of workers in any civilization were to abandon 
class thinking, and substitute actual fact-finding in its place, 
they would do away with classes and with special privileges 
of every kind much more quickly than the most ruthless 
dictatorship of the proletariat ever could. 

For they would not waste their time then warring on 
profits. They would unite, instead, in such a war upon waste 
that everybody everywhere would achieve permanent eco- 
nomic security, with the expenditure of so little time and 
effort, that private accumulations would lose their historic 
meaning, and people would be no more interested in piling 
up personal fortunes than they are now interested in drawing 
water from their faucets and putting it into pails to keep 
around the house. 

If water were scarce, of course, that is what we would all 
be doing. If we had no water system and had to depend for 
our water supply upon the springs which each one of us 
individually could find, or if the system we had installed 
only spurted a little water occasionally, a large measure 
of our thought and labor would necessarily go into the 
individual saving of water for individual protection, and 
many fools among us would doubtless erect great tanks and 
cisterns in our front yards, not for convenience but to 
demonstrate to everyone just what superior persons we are. 

That is the way the world has regularly acted in the mat- 
ter of its food-shelter-and-clothing supply. It was only nat- 
ural, then, that the unsupplied should concentrate their 
thinking upon a more equitable distribution of these neces- 
sities. And it was only natural, on the other hand, that the 
well supplied should hate to have the unsupplied entertain- 
ing any such dangerous ideas. 


That, in a nutshell, illustrates most of the argument dui- 
ing the past fifty years between the proponents of socialism 
and the defenders of capitalism. In this controversy, the pro- 
ponents of socialism had an incorrect theory, while most of 
the capitalists had no theory whatever. If it was a mere 
matter of debate, the socialists generally tore their op- 
ponents' logic all to pieces. 

It was not, however, a mere matter of debate. In America, 
at least, capitalism advanced in spite of its poor arguments, 
or its lack of arguments. When agitators agitated for a "just" 
distribution of wealth, defenders of the existing order de- 
clared that system was eminently just, although millions 
even of little children might be suffering desperately be- 
cause their fathers were denied the opportunity to earn a 
decent living. 

When socialists advocated "cooperation instead of compe- 
tition," the defenders of capitalism actually tried to prove 
that "the survival of the fittest" was the first law of nature 
and that it was all natural and proper, therefore, that we 
should all be engaged in a desperate struggle against each 
other. Those fittest to compete, they said, would survive, and 
those who were so lacking in the ability to look out for them- 
selves that they could not survive without the help of an 
organized society would very properly be snuffed out of exist- 
ence. And then, to reduce their own arguments to the ulti- 
mate absurdity, they were likely to follow up this stupid and 
inhuman pronouncement by declaring that socialism was op- 
posed to religion, and to call even upon the followers of 
Jesus to have nothing to do with this dream of human co- 
operation and to rise to the defense of this holy free-for-all 
fight of everybody against everybody in which only the 
strongest and most pugnacious could hope to survive at all. 

When one looks back upon the arguments which were 
customarily advanced for socialism and for capitalism, it is 


little wonder that those workers whose minds were inclined 
to be logical so often became socialists. But life is bigger than 
logic, and the great majority of American workers, even 
while they might admit that the socialists had the best of the 
argument, did not espouse socialism. When times were par- 
ticularly hard and unemployment widespread, the socialist 
vote grew, but when times got better, the socialist vote 

And times did get better under capitalism. That was a fact 
which the socialists could not laugh off. Capitalism was stu- 
pid. It blundered. It did wrong things often; and when it 
did right things, it gave wrong reasons for doing them. It 
had no social philosophy, no conscious social aim. It was 
utterly unaware of itself, and could therefore give no con- 
vincing apology for its existence. But it raised the standard 
of living of the masses, because it could not help doing so; 
and the masses, who were more interested in living than 
they were in theories about life, did not therefore rise in 
rebellion against it. 

"If I had a son in college," I declared many years ago, 
"and he did not become a socialist before he was twenty-one, 
I would disinherit him. But if he remained a socialist," I 
added, "after having an opportunity to study the real nature 
of our economic and social development, I would likewise 
disinherit him." 

It is hardly necessary today, however, to swallow the so- 
cialist theory in order to avoid swallowing the mess of stupid 
and often contradictory theories which once passed as the 
philosophy of capitalism. For modern industrialism has be- 
come, to some degree, at least, aware of itself. It is discover- 
ing its purpose, and it Is discovering the principle upon 
which it must operate if that purpose is to be achieved. 

This purpose is positively not the survival of the strong- 
est, nor of the most quarrelsome. It is, in fact, the very pur- 


pose which has inspired the socialists and the communists: 
the creation of a new and better world, and the substitution 
of peace and plenty through all-around cooperation in 
place of the poverty and bitterness of the old struggle for 

The socialists sought to achieve this end through legisla- 
tion either through seizing the mills and mines and busi- 
ness establishments by political force, or by curbing and dis- 
couraging them through taxation until their owners would 
be willing to turn them over to a working class government 
for a reasonable financial compensation. The communists 
have sought the same end through setting up a dictatorship 
of the proletariat and the stripping of all but the wage- 
workers of political or economic power. It is easy to see why 
either program is hateful, in the eyes not only of the holders 
of special privilege, but of the masses who have looked for- 
ward hopefully to the time when they might become prop- 
erty-owners and somewhat privileged persons themselves. It 
is more to the point, however, to discover what is actually 
wrong with such a dream. 

It is not necessary to fall back on the generalization that 
industries can not be managed by political governments. 
There are many industries, such as the postal systems, which 
are generally so managed, and which develop considerable 
efficiency. On the other hand, there are no instances at hand 
in which even the best-managed industries under govern- 
ment control have raised the standard of living of the masses 
in the completely revolutionary way that modern mass pro- 
duction, under scientific instead of under political manage- 
ment, has done. 

Governments may establish low rates for the services which 
they give and make up the deficit through taxation. When 
our so-called private industries give low-cost service, how- 
ever, they must do so through discovering better methods of 


production and distribution. As a matter of fact, of course, 
none of our great modern industries is private. All are serv- 
ing the masses, and have no other justification for existence. 
Mr. Ford and his son may own all the stock of the Ford 
Motor Company, but the Ford Motor Company does not and 
could not rest upon such a flimsy thing as a mere legal title. 
Governments themselves, which issue and defend such titles, 
have no rights per se. Governments derive their rights from 
the people governed, just as industries, fundamentally, de- 
rive their rights from the people served. To oppose socialism 
or government ownership because they place the rights of 
the masses of human beings above the rights of private prop- 
erty-owners is really to argue in favor of socialism or govern- 
ment ownership. The only real argument against so-called 
public management of industry is that it is less public, in 
this age of science, than is scientific management. 

Political management, whether autocratic or democratic, 
is necessarily management by opinion. Industrial manage- 
ment is necessarily management by the facts. It is true that 
industrial management seeks profits, and political manage- 
ment may ignore profits, making up its deficits by taxation. 
Such a system may seem to result in making certain services 
free; and if wealth is being unjustly distributed in the 
economic field that is, if the rich are becoming rich 
through levying taxes on the poor it is eminently right that 
the political government should serve the poor by levying 
taxes upon the rich. 

Now, that was the way in which the rich once became 
rich, and it was the way, even under capitalism, in which 
the people, rich and poor, still supposed that riches were to 
be acquired. Karl Marx, who was an unusually keen ob- 
server, analyzed the social set-up keenly; and though capital- 
ists were angry at many of his findings, they could not dis- 
pute them. Labor, he said, is a commodity, and that was 


their opinion too; but the capitalists were acting upon the 
opinion, whereas he was merely making the observation. He 
said that wages would be highest when labor was most in 
demand; and since there were generally more workers than 
jobs, wages would generally tend toward a mere subsistence 
level. Wages, he opined, were part of the expense of pro- 
duction. If wages were high, prices must be high; and if 
prices were higher than a competitor's prices because wages 
were higher than the competitor was paying, the man who 
paid the higher wages must soon go out of business. To all of 
which the average capitalist heartily subscribed. 

It is saying nothing against Karl Marx to say that he did 
not and could not foresee the modern era of mass produc- 
tion. He could not understand Henry Ford, for the simple 
reason that Henry Ford had not yet happened. He reasoned, 
instead, that things must in time become unendurable; and 
that, in the most highly developed industrial countries, the 
political government, not bound to follow the principles 
which kept the capitalists forever grinding down the work- 
ers, would of necessity take over the industries and there 
would be an era of "state socialism," to be followed in time 
by a complete industrial democracy or communism. 

Everything considered, this was not such a bad guess, for 
if capitalism was what the capitalists themselves assumed that 
it was, some such emergency must have arisen in every 
highly developed industrial country. As a matter of fact, it 
was in a country which had hardly been touched by machine 
production in which communism actually made its bow; 
and it was in America, in which capitalism reached its high- 
est development, that neither socialism nor communism 
could secure a hearing excepting during short periods, of 
business depression. 

While capitalism was operating on opinions, instead of 
upon facts, Marx's opinions were about as sensible as any- 


body's. Only as business discards opinions, however, and 
proceeds to act upon fact-finding, is it most successful, and 
where business is successful, Marxian doctrines make no 

There are, at the most, but a handful of communists in 
the United States, that is, of communists who have any 
clear concept of the principle of communism. These com- 
munists at times, however, may get a considerable following, 
and those who do not understand may think that commun- 
ism is growing. What is growing at such times, however, is 
unemployment. All that is happening is that larger and 
larger groups are losing their buying power. The commun- 
ist leaders may not be great tacticians, but they are sensible 
enough, at least, to understand this; and they do not fritter 
away these opportunities by appealing to the intelligence of 
the unemployed, but to their misery. The capitalist system, 
they cry, has failed, and it has failed, as far as these particu- 
lar hearers are concerned. It has left them out of its benefits. 
The communists, as these wretches see it, are considering 
their problem, while "capitalism" is not: and so, in their 
desperation, they become "communists" until business, for 
some reason or other, picks up. 

Unfortunately, many business leaders in such a situation 
do exactly what the communist leaders want them to do. 
Instead of tackling the problem of unemployment, they 
tackle the doctrines of communism, and try to persuade the 
hungry that the system which is not giving first attention 
to their hunger is, when we study it out carefully enough, 
the very best system that we can possibly hope to have. And 
when this line of argument does not seem to register effec- 
tively upon hungry stomachs, the business men begin to join 
movements "to stamp out communism." 

Communism feeds on all such movements. Incidentally, 
all sorts of racketeers now step into the picture and begin to 


graft upon such business men. Such business men, of course, 
are traditional thinkers, and it is easy to persuade them that 
any variation from traditional thinking is "communistic." 
These racketeers, then, supported by the contributions of 
business men, launch upon nation-wide heresy hunts. They 
fill the country with "black lists" which often include the 
names of the leading humanitarians and the leading scholars 
of the day. Nothing in particular happens, of course, except- 
ing that the racketeers get a living and the deluded business 
men pay for it, and the communist leaders are given a lot 
of free advertising which, if they were better tacticians than 
they are, they might turn to considerable advantage. 

If these business leaders only knew it, they could make 
America absolutely immune to communist propaganda. It 
would not be necessary to deport or imprison or even censor 
a single communist. All that they would have to do would 
be to tackle the problem of unemployment which happens 
to be a problem which business can solve and which the 
communists can not. It is not a problem, to be sure, which 
can be solved in a day; but if American business would once 
promise to solve it, if it would once let the whole world 
know that it recognized the problem as one which business 
must solve at any cost, that in itself would fasten the atten- 
tion of both workers and unemployed upon the business 
program, and distract it from the agitators and demagogues 
who now get a hearing only because business has not yet 
publicly accepted its responsibility. 

These so-called communists, after all, do not want com- 
munism. What they really want is exactly what business men 
want them to have, and what they must have if business is to 
be successful. They want a higher standard of living. They 
want economic security. They want a friendly society in 
which they will not have to ask anyone else for the privilege 
of earning a living, but in which the job of getting a living 


will be so simplified that anybody can do it, and most of 
our human energies can be devoted to achieving a more 
abundant life. 

When people are getting these things, they are utterly 
immune from communist agitation. In fact, even where they 
are not getting them, but where they find themselves a little 
better off year by year, and a little nearer to this hoped-for 
goal, all talk of overthrowing the system which is bringing 
this about seems so utterly irrational as to be amusing instead 
of dangerous. But these things are not merely natural desires 
which all human beings share; they are necessities of our 
industrial system. For that system is built upon fact-finding 
upon the discovery of better and better ways of doing 
whatever we are doing and of how to do things which we 
have not been able to do before. All this means a constant 
increase in production, which demands a constant increase 
in consumption in other words, the higher and higher 
standard of living which everybody naturally wants. 

The real fallacy of socialism and communism is that they 
are not based upon human nature as it actually is, nor upon 
human society as it actually functions. They are based, 
rather, upon human longings for justice, and upon a con- 
cept of society which is no longer tenable. Human nature, 
to be sure, is social. It is cooperative in character, and no 
strictly human achievements, such as language and industry 
and art, can happen as the result of any isolated individual 
effort. But human nature, as we have all learned to our sor- 
row at times, is not cooperative in the sense that socialists 
have visualized cooperation. It is disillusioningly slow, at 
least, to cooperate for justice, while quick to respond to 
immediate self-interest. 

The victims of injustice readily cry for justice; but let 
these victims once become beneficiaries of injustice, and 
their interest in justice seems to wane. When slaves became 


slave drivers, it did not mitigate the abuses of slavery. When 
workers became capitalists, their fellow workers no longer 
seemed to be their fellows. Even when hot-headed socialists 
have been elected to offices of responsibility, the tendency 
always was toward a cooling of their heads. 

If human nature were only different than it is, social jus- 
tice might conceivably be achieved. But human nature, how- 
ever it may complain against injustice, seems to be domi- 
nantly selfish. At any rate, human beings are evidently inter- 
ested in something much more than they are interested 
in justice, or in the equitable distribution of this world's 

This seems too bad to those who are not willing to face 
the facts. To fact-finders, however, the fact may hold great 
promise. For if the desire for justice had been the dominant 
human motive, instead of the impulse toward a larger and 
larger life, we might have had justice long ago justice, but 

The equitable distribution of goods in Caesar's time would 
still have left the world in poverty; but the world would not 
have known that it was in poverty because the standard of 
living of the masses would have been better than it ever was 
before. In all probability, a world which thought and felt 
chiefly in terms of equitable distribution would have been 
contented with any political arrangement which brought it 
about, and human society might have been ever so placid 
and idyllic, but stagnant just the same. 

But selfishness triumphed. Some people grabbed more 
than their share of wealth, and indulged in luxury. They 
robbed the poor in doing so, but they made the poor con- 
scious of being poor. They filled the world with hate, per- 
haps, but they also filled it with longings for more comforts 
and more luxuries; and when a way was discovered to pro- 
duce wealth by machinery, more and more people selfishly 


attempted to get rich by exploiting the masses, quite forget- 
ting their ancient grievances against exploitation. 

With all our progress, then, we seemed humanly to be in 
as bad a fix as ever; and the idea of running all this machin- 
ery by an orderly process of government, which would insure 
equitable distribution, made a strong appeal to many cul- 
tured minds. But it was the same old idea the idea of dis- 
tributing such wealth as was being made. The real reason 
that the idea did not gain more headway than it did was that 
selfish people, in their eagerness for more wealth, abandoned 
old methods and discovered methods by which more wealth 
could be produced and distributed. The result was that, 
although this new wealth was not distributed equitably, the 
masses now reached a higher standard of living than they 
could have reached if wealth had been distributed equitably 
at any previous period of history. 

Eventually the great discovery was made that this won- 
derful machinery, if it were to bring constant and continual 
profits to those who wanted them, must raise the standard 
of living of the masses, and raise it higher and higher as more 
efficient methods of production were discovered. For the 
masses constituted the only market to which such large- 
scale production could look; and mass production began its 
career of making prices lower and lower, wages higher and 
higher, and giving better and better service to everybody. 

This was selfishness of the first order; but it was satisfying 
human needs more fully than any unselfish system of social 
justice could possibly have done. Of course, mass production 
is in its first stages as yet. It has only begun its revolutionary 
work of enlisting human selfishness for the widest possible 
human service. It is achieving social justice, but it can not 
stop with the achievement. It will abolish unemployment 
because it must. It will give higher and higher wages because 
it selfishly must. And it will necessarily organize the whole 


world in cooperative endeavor, for the utmost possible serv- 
ice to all human beings everywhere, without having to wait 
in the least for any great change in human nature. And the 
result must be a more complete and more dynamic expres- 
sion of the social character of human life than the socialists 
and communists have ever dreamed of. 


I HAVE never been a free trader, nor a dyed-in-the-wool 
protectionist. I have always been an opportunist, as far 
as the tariff is concerned; and I mean by that that I have 
tried to study specific tariff proposals in terms, not of some 
far-off, idealistic program, but of the best interests of my 
country at the time. 

I have accepted it as a fact, moreover, that human nature 
is selfish; and it would never occur to me to urge Americans 
to neglect their own business interests and to consider the 
tariff question in terms of what, in the long run, might be 
best for the whole world. 

If a nation can become more prosperous by shutting out 
all foreign competition, it seems to me a waste of time to 
argue against her doing so. People, to be sure, do not always 
act according to their own best interests; but in business mat- 
ters, as a rule, we may depend upon their acting according 
to what they conceive to be their best business interests. I 
have no criticism whatever to make of the Golden Rule; but 
until people can be persuaded that its gold is negotiable, it 
will never figure very largely in any tariff debate. 

Mass production, however, has put the tariff question in 
a new light. When such men as Henry Ford ridiculed the 
high protective tariff, whereas the business leaders of the 
previous generation so generally seemed to regard it as a 
Sacred Principle, many doubtless attributed it to the idio- 
syncrasies of Mr. Ford. They thought he was a man of queer 
ideas. They compared him, perhaps, with some scion of 
royalty who becomes a communist, or with some bishop who 
espouses atheism. They could not see that Mr. Ford was 



speaking for business interests as clearly as the members of 
the Old Guard had ever spoken; but that business, as Mr. 
Ford was doing it, was a very different thing from business 
as it had been done. 

Business as it had been done needed protection. Business 
as Mr. Ford was doing it did not. But Mr. Ford's way proved 
eventually to be the more profitable way, and mass produc- 
tion principles were, little by little, adopted by other busi- 
nesses. Those which adopted them most thoroughly soon 
became dominant; but the new way furnished its own pro- 
tection and made a protective tariff unnecessary. In Presi- 
dent Hoover's administration, America observed the strange 
political spectacle of big, successful businesses generally lin- 
ing up in opposition to a higher tariff and failing to win 
their point. 

The Republican Party, traditionally, was the party of Big 
Business. It had become the party of Big Business, mainly, 
through its protective tariff policy. The Democratic Party, 
usually, favored a lower tariff, arguing that Big Business, by 
keeping out foreign competition, was forever raising prices 
at home, and therefore taxing the consumers of America to 
pile up huge fortunes for the manufacturers. The Repub- 
licans answered that foreign goods could be sold at low prices 
in America because foreign labor was underpaid; and if the 
tariff were lowered, American employers would have to meet 
this competition by paying low wages top. 

The Republicans usually won out at the polls. Just how 
much this argument had to do with the victory, no one, of 
course, knows. The average voter, perhaps, did not know 
just what a tariff was. He wanted high wages and he wanted 
low prices; but it was generally assumed that he couldn't 
have both. All sides seemed to take it for granted that only 
if he paid low wages could the manufacturer sell goods at a 
low price. 


But mass production gave high wages and low prices at 
the same time. Under mass production methods, one just 
naturally went with the other. This was all strange and 
unheard of; but the employer who adopted the principles 
and discovered that they worked soon found that he did 
not need any tariff to protect him against low-wage Euro- 
pean industries. High wages, he discovered, compelled bet- 
ter management; this better management eliminated waste, 
enormously reduced his overhead expenses, made continual 
improvements in methods necessary and resulted in such 
increased production that the actual labor costs, per unit of 
product, were constantly going lower, enabling him not only 
to meet and beat competition at home, but to undersell in 
Europe the products of European low-wage industries. 

If mass production had meant a mere change in factory 
technique, human history at this juncture must have been 
much different than it actually was. If that were all that it 
meant, American employers, at least, would have adopted it 
immediately. For American employers were noted for their 
progressiveness when it came to adopting new machinery. It 
had become a habit in America, for labor in America had 
historically been much scarcer and therefore more high- 
priced than labor in Europe, and American employers early 
learned the advantages of adopting labor-saving machinery. 
American employers, in fact, when they were confronted 
with the competition of mass production, did go in quite 
generally for improved methods. Many, in fact, adopted 
large-scale production, in the belief that they were going in 
for mass production. 

But they did not adopt genuine mass production, which is 
production for the masses. That is, the great majority did 
not. That would have required a complete abandonment of 
several long-intrenched traditions. If they paid higher wages, 
they did it grudgingly, for they still believed that higher 


wages meant higher labor costs. If they charged lower prices, 
moreover, they did so to meet some particularly annoying 
competition, and did not concentrate on the problem of find- 
ing out how low their prices might profitably be made re- 
gardless of competition. They wished that something might 
happen to enable them to keep prices up; and they had had 
an extensive education by this time in what the protective 
tariff could do in this direction. 

Whenever the tariff came up for revision, then, American 
manufacturers had traditionally flocked to Washington, or 
sent their lobbyists there, to secure as high a tariff as pos- 
sible on the particular things they had to sell. From the Civil 
War to the World War, the great leaders of American manu- 
facturing had done this; and after the World War, even 
after mass production had demonstrated its principles, the 
traditionally minded business men of America did the tra- 
ditional thing. They clamored for a higher and ever higher 
tariff on the things they had to sell. 

The crying need of Europe at this time was for the 
resumption of international trade. America had become 
the great creditor nation of the world; and it was to the 
American market that European manufacturers looked most 
eagerly. The cry went up from everywhere that Europe 
could not pay her huge debts to America in gold, and that 
she must pay them in goods, and the American tariff became 
a sore spot in almost all European thinking. America, how- 
ever, not only retained her tariff wall, which continued to 
shut out much of European competition, but her great mass 
production industries, which had achieved the seeming mir- 
acle of reducing labor costs by paying higher wages, were 
underselling European industries in Europe. 

The European countries, therefore, began to adopt retali- 
ative tariffs, often aimed directly to shut out American high- 
wage competition. This, it was admitted, was no answer to 


their economic problems. The step was taken, generally, in 
desperation more to compel America to reduce her tariff 
than with any hope that the step in itself would bring about 
prosperity at home. But America did not respond. When 
Mr. Hoover was elected President, however, many Euro- 
peans breathed more easily. Mr. Hoover, they knew, had an 
international view; and he was an economist, not a mere 
political patriot. 

But under the Hoover administration, the tariff went up 
once more. Mr. Hoover himself had cautioned against this. 
He had called Congress together in fulfillment of a campaign 
promise to secure farm relief, and he specifically asked that 
there be no general tariff revision but that Congress confine 
itself only to such items as might specifically give to Ameri- 
can farmers a protection equal to that already enjoyed by 
American industries. But the caution was unheeded. The 
unsuccessful industries of America now clamored for a 
higher tariff, while the greatest and most conspicuously suc- 
cessful industries opposed any such step. Congress enacted a 
tariff higher than ever. 

For the first time in American political history, the lead- 
ing economists and the most successful business leaders were 
in general agreement against this tariff bill. More than a 
thousand American economists petitioned the President to 
veto it. The President, however, signed it, and it became a 

Europe was bitterly disappointed; but Americans, even 
those who most urgently opposed the bill, could understand. 
This was a Republican congress, and to the Republican 
Party, the idea of the protective tariff was a most sacred 
tradition. Successful business, to be sure, opposed any in- 
creased tariff now, and the Republican Party was supposed 
to be the party of successful business. Congress acted, how- 
ever, not according to the advice of successful business, but 


according to the traditions of successful business and accord- 
ing to the demands of the great majority of American busi- 
ness men who still held to those traditions and who, because 
they held to the traditions of success, were no longer suc- 

This was the Tariff of the Unsuccessful Business Men, 
allied with the unsuccessful farmers. It was the tariff of those 
who had failed to grasp the principles of mass production. It 
was the tariff of those who based their thinking upon truths 
which were no longer true, who assumed that low wages 
still mean lower labor costs and that pauper labor, if per- 
mitted to bring its product to market, will crowd the prod- 
ucts of well-paid labor out. 

Science had now discovered a new truth; but political 
parties cannot be expected to react overnight to every new 
discovery. Political parties develop, rather, around old truths 
that have long since been discovered; and it may easily be 
that, by the time the party has developed, the truth about 
which it has developed has been supplanted by another truth. 

I am not discussing, at any rate, the correctness or incor- 
rectness of the theory of the protective tariff, or the historic 
role it has played in American prosperity. I am simply point- 
ing out that mass production discovered that it did not need 
and could not use any such protection, while traditional 
business did not make any such discovery. Traditional busi- 
ness, in fact, needs all the protection it can get from every 
source, and more. Even then, it cannot succeed; for while 
it may thus meet and beat the old forms of competition, it 
cannot hold its own against the inroads of mass production. 

If one is to grasp the exact relationship of mass produc- 
tion and the tariff, it is necessary to note one other thing. 
Although the heads of the great mass production industries 
now advised against increasing the tariff, they did not organ- 
ize politically to prevent such an increase. They did not, in 


self-protection, need to do any such thing. While a higher 
tariff, as they saw it, would injure business generally, it 
would not put their mass production industries at the mercy 
of any competitors. There was no call, then, for desperate 
opposition. In case the nations of the world continued to 
raise higher and higher tariff walls against each other, these 
huge mass production industries knew what to do. In fact, 
they were already doing it. They were locating factories in 
the European countries whose tariffs were so high that they 
could not profitably continue to manufacture in America 
and export to those countries. 

Mr. Ford, once again, was the most conspicuous leader in 
this movement. He not only built factories throughout 
Europe, but he introduced the same low-price, high-wage 
principle by which he had so conspicuously succeeded here. 
Mass production, it may be said, not only did not need high 
tariffs but it did not depend for its success upon political 
governments' abolishing them. The Ford business now in- 
creased, in spite of the world-wide business depression which 
was due in part to these international tariff wars. The num- 
ber of Ford employees actually increased, but not the 
number employed in America. 

Times were hard throughout the world. It was essential 
to every business that every possible economy be employed, 
particularly such a business as the manufacture of motor 
cars, for there was widespread unemployment and the masses 
had nothing, it seemed, to spend for luxuries. If there were 
any saving to be effected through paying low wages, we may 
be sure that Mr. Ford would now take advantage of it* 
Instead, he raised wages in his American plants to a seven- 
dollar in place of a six-dollar minimum, and arranged at 
once to pay workers in all his European enterprises a wage 
which would represent buying power equal to the wages 
he was paying in Detroit. He did this because it was good 


business to do it. The great business necessity of the times 
was a wider distribution of buying power. 

Buying power could not be increased either by raising 
tariffs or by lowering them. It could be increased, in the first 
place, only if the production of wealth were increased, that 
is, if better methods were employed whereby production 
costs might be diminished. If business is to dispose profitably 
of this increased production, however, more buying power 
must be distributed, particularly through higher wages, so 
that the masses may be able to buy it. 

The coming of Ford was not welcomed by the tradition- 
ally minded business men of Europe. They looked upon his 
intrusion as a calamity, in much the same way that American 
business had once looked upon his "upsetting the wage 
balance" when he first introduced his five-dollar minimum 
wage. On the other hand, the going of so much Ford indus- 
try to Europe was not welcomed by American business men 
now. While they had come to see, by this time, that the 
Ford policies had greatly helped business throughout 
America, they could not see anything but harm to Ameri- 
can business in his decision to carry on such a large part 
of his future enterprises in foreign lands. 

The very persons, in fact, who still believed that they 
must protect themselves by high tariffs against the products 
of low-wage European industries, saw nothing but disaster 
in this movement by which, inevitably, wages generally in 
Europe must be raised. 

In the meantime, however, European nations began to 
find themselves suffering from the "protection" which they 
had now built up. Not a single European nation could stand 
as much of this sort of protection as America had been able 
to stand. For, industrially and commercially, the United 
States was not like any European nation but was more to 
be compared with Europe as a whole; and the result of 


the many nations' tariffs was to strangle European indus- 
try, much as industry would have been instantly strangled 
in America if, instead of one national tariff, each Ameri- 
can state had set up high tariffs preventing trade with other 
states. Agitation began, therefore, for an "Economic United 
States of Europe." The different countries, often, hated each 
other and feared each other, and there was little in the psy- 
chology of the situation to foster European union. But eco- 
nomic necessity has a way of making itself felt, even when 
sentiment and tradition and public opinion seem to be pull- 
ing in the opposite direction. In spite of everything, there- 
fore, this movement grew. 

In all the countries there was a bitter feeling against 
America, and a bitter resentment against the introduction of 
American methods in Europe. Of necessity, however, Ameri- 
can methods were more and more employed at least, 
methods which were supposed to be American methods. 
Obsolescent machinery was scrapped. Systems of factory co- 
ordination were installed. Production charts were drawn up, 
and all sorts of efforts were made to catch the "mysterious" 
American technique. But these efforts were often disappoint- 
ing. They might result in large-scale production, and even 
in low-cost production, but not in mass production. The only 
way that mass production can be achieved is to produce for 
the masses at a price which the masses can pay, and to see 
to it that the masses have sufficient buying power to meet 
this price. 

Two things interfered with the adoption of this genuine 
mass production. Traditional thinking, in the first place, 
inhibited employers generally from paying high wages. No 
matter how much they studied Ford's success, they persisted 
in assuming that wages must come out of profits, instead of 
recognizing the mass production fact that higher wages come 
out of higher production. They were not slower than Ameri- 


cans have been to recognize this truth. Ford had made his 
great demonstration right under American eyes; but it was 
a decade or more before any considerable part of American 
business woke up to the significance of the demonstration, 
and the majority of American business men do not compre- 
hend it yet. 

In the second place, even if this principle had been 
grasped, the average European manufacturer could not sell 
to large masses anyway. The protective tariffs made this 
impossible; but the people of each nation were so afraid of 
the economic domination of some neighbor nation that it 
seemed impossible to remove these tariffs. Economic neces- 
sity, however, remained on the job. To reorganize their 
industries as they had to be reorganized, employers had to 
have large capital; but large capital was not available gen- 
erally to industries which, in the very nature of their situa- 
tion, could not reach a large market. To say nothing about 
Europe competing successfully with America now, it seemed 
necessary that Europe must tear down her internal tariff 
barriers if European business was not to break down entirely. 

If one tried to judge the trend of the times by public 
opinion, he must surely have reached the conclusion that 
such an economic union in Europe would be impossible. If 
one studied the forces of economic necessity, however, he 
could not help seeing that such a union was inevitable and 
that it would probably be brought about within a very 
few years. 

And when this union was effected, one might be sure, 
Europe would be able to compete successfully with America. 
It would not follow, of course, that she would so compete; 
but she could then take up mass production, which she could 
not do so long as Europe was divided by high tariff walls into 
little isolated economic groups. Whether she would actually 
achieve mass production or not, however, would depend 


mainly upon how definitely her producers attended to the 
task of creating and distributing buying power. 

But that she would eventually do this was also, for a dif- 
ferent reason, inevitable. It was inevitable for the same 
reason that mass production had become inevitable in 
America. In America it was inevitable because it was started 
and tried and proved to be more successful than traditional 
production, and because, wherever it was tried, prices went 
down, wages went up and total profits increased because the 
masses could buy not only more mass production products 
but more of everything that business had to sell. 

And mass production, even in Europe's darkest hour, was 
already being tried in Europe. Mr. Ford himself, for one, 
was trying it. He was raising wages. He was distributing buy- 
ing power not through giving away his money but through 
organizing the production of more wealth. Tariffs, for which 
he had no use, had forced him to take this step. In no coun- 
try, since the advent of mass production, had these tariffs 
done what they were designed to do. But they did have inter- 
esting results. 

They were designed to fence prosperity in; but in the 
smaller countries, they had effectively fenced it out. In 
America, they were designed to prevent the competition of 
low-wage industries, on the theory that low wages meant low 
labor costs. Under mass production, however, higher wages 
resulted in lower labor costs; and these high-wage industries, 
instead of enjoying the "protection" which was given them, 
were exporting mass production factories to Europe and 
building up European industry so that it could effectively 
compete with ours. 

The result upon America, incidentally, must be one which 
no traditionally minded business man could be expected to 
grasp. For this building up of European competition, instead 
of proving disastrous to American business, must prove even- 


tually to be of great benefit. At first, no doubt, there was 
some business loss to America in so many American indus- 
tries deciding to build in Europe instead of distributing 
their whole pay rolls here. But the tariffs, designed often to 
retaliate against the American tariff, had so curtailed ex- 
ports that they could not have continued their expansion 
in America anyway; and by distributing buying power in 
Europe, these industries were now creating a market for all 
sorts of American products which, without this market, must 
have remained unsold. 

The European tariffs, to be sure, might still make it im- 
possible for Europe to buy many of the things which Ameri- 
cans had to sell. Hence this increased buying power in 
Europe might not result in much increase in American ex- 
porting. But the same forces which worked first to break 
down the tariff walls in Europe must eventually work to 
break down the walls between Europe and the United States. 
There is nothing in the state of public opinion which war- 
rants any such conclusion. This is not a prophecy based upon 
the election returns. It is a deduction, rather, from economic 
necessity. Mass production is the most successful form of 
production, and therefore must dominate; but mass produc- 
tion, so far from needing protection against old-style, low- 
wage production, demands that the masses everywhere have 
more buying power and therefore wants its competitors to 
adopt the most successful low-cost methods too. Nor will this 
lead to overproduction as long as there are twelve hundred 
millions of people living with almost no buying power as 
yet, and millions in almost every country with too little 
buying power for the best interests of the world. 

As I have said before, I have never been a free trader, and 
I have not intentionally advanced any argument against the 
theory and practice of protection, as it has historically oper- 
ated in the United States. But that theory and practice, what- 


ever advantages there may have been in them, were the 
theory and practice of a passing time. We have entered a 
world of mass production. Mass production can not stop at 
national boundaries. It must produce and distribute more 
and more wealth, and more and more buying power; and it 
must favor the production and distribution of more wealth 
and buying power in every part of the world. Mass produc- 
tion demands the prosperity of all; not merely of workers 
and consumers and of other businesses at home, but the pros- 
perity and consequent buying power of other nations as well. 



FOR thousands of years, suffering humanity has longed 
for peace and entered into war. The year 1914 was no 
exception. If that year was different from other years in 
which war clouds had burst, it was in the greater determina- 
tion of the various peoples of Europe not to fight each other. 
Anti-war propaganda had now circled the globe. Both capital 
and labor had become international. A World Court had 
been opened at The Hague. Great international labor con- 
ventions cheered the orations of French and German and 
Russian delegates, as they declared that the aroused workers 
of the world would no longer be duped into killing each 
other wholesale because their masters may have fallen out 
and were willing to sacrifice the common people by the mil- 
lion in the pursuit of their own private gain. 

And many great business leaders, instead of being annoyed 
by such outbreaks, were rather pleased. They did not neces- 
sarily agree with the reasoning. If workers imagined that 
war would help the great capitalists, they were simply mis- 
taken, but it was something, as these capitalists saw it, to 
have the workers realizing that war was not and could not be 
of any advantage to labor; and they gave the international 
socialist movement some credit for preserving European 

Never before was there such widespread feeling against 
war, or such an opportunity to give expression to it. Trans- 
portation and communication had so advanced, and literacy 
had become so general, that it was impossible now to rep- 
resent all foreigners as barbarians, while it was easier than 
ever to see through the hypocrisy of those who made flam- 



boyant appeals to patriotism for the sake of getting a polit- 
ical following. 

Anti-war literature was extremely popular, while literature 
favoring war was now practically unknown. Of course there 
was much nationalist literature many books pleading for 
more patriotism and more attention to the nation's defense. 
But these books did not advocate war. The old claim that 
war brought out the highest virtues of courage, honor, self- 
sacrifice, or that it was nature's way of achieving the sur- 
vival of the fittest, could not now be sustained. The public 
was quite well aware, by 1914, that war tends also to bring 
out all that is savage in man, and that it selects the fittest 
youths, not the unfit, to go forth to die, or to become phys- 
ically or mentally unfit. 

Economists, moreover, now knew that war does not pay, 
and that victory may be quite as expensive as defeat. One 
book, by Norman Angell, picturing war as "The Great 
Illusion," received a world-wide discussion and was circu- 
lated enthusiastically by both capitalists and socialists. 

Another argument against war was found in the very de- 
structiveness of modern war machinery. It was pointed out 
that fighting would not be glorious in any war which might 
now occur, for man would not be pitted against man in even 
combat but masses would simply be ground to death in huge 
slaughtering machines. 

If feeling and argument could preserve world peace, the 
peace of the world would seem to have been secure in 1914. 
With that object lesson behind us, one should hesitate today 
before making any optimistic forecasts concerning the peace 
of the world. It is true that there are still greater peace move- 
ments today. It is true that we have a League of Nations, 
which we did not have before, and a more practical and 
effective World Court. It is true also that we have the mem- 
ory of a war so devastating, and of an aftermath so disil- 


lusioning, that a solemn treaty to "outlaw" war was forced by 
public acclamation upon almost all the governments of the 
world. In view of what happened in 1914, however, there is 
no reason to believe that any or all of these movements can 
finally safeguard the peace of the world. 

Fortunately, however, we do not have to depend upon 
these movements. The writer believes that all of them have 
educational value, and that they have added much to the 
machinery of peaceful diplomacy; but if his hope for world 
peace were based upon parliamentary and diplomatic pro- 
cedure, he would have to confess to very little optimism. 
Peace, however, fundamentally depends upon something 

Peace within the family depended fundamentally upon 
how well the family solved its economic problems. All that 
the family was later able to teach about love and brother- 
hood hinged upon what it was first able to do in the matter 
of securing a living for all its members, the old and the 
young, the weak as well as the strong. 

Peace within the state had the same economic basis. A 
state might seem ever so powerful, and yet, if its citizens and 
its subjects could not get a living, it fell; and even the fear 
that its overthrow would lead to even greater disaster was 
never enough to keep such a state from falling. 

Now we are in the machine civilization; and world peace 
within that civilization depends, not upon how earnestly 
world peace may be desired, nor even upon what the world 
decides to do politically, but upon how the machine actually 
provides for the economic necessities of the world. 

We can not be sure, unfortunately, that there will not be 
another war. It is certain, however, that the economic system 
which has always heretofore been dominant made war in- 
evitable, and that the system which is now becoming domi- 
nant makes for peace. War was always bad for business, but 


that did not prevent its coming, any more than the fact that 
typhoid is bad for those who are spreading it could prevent 
the plague. Whether we have another world war or not 
depends definitely upon business; but not upon whether 
business favors war or peace for there can be no question 
now as to what business wants but upon how soon the busi- 
ness leaders of the world will substitute fact-finding for their 
traditional thinking. 

The great business leaders have already made the substi- 
tution, and as they have done so, they have not only been 
making peace but making profits. Those who are still think- 
ing traditionally, however, are not making profits, or are 
finding their profits more precarious year after year. Human 
nature being what it is, then, we may be sure that business 
will eventually take the profit-making course, and that will 
be the true peace-making course. 

After all, there is nothing mysterious about war, even if it 
has seemed to come when nobody seemed to want it. People 
fight, not because they want to, but because they are on dif- 
ferent sides. When they fully realize that they are on the 
same side, they stop fighting. 

The formula by which war might be abolished was dis- 
covered ages ago. It was known as the Golden Rule. It con- 
sisted of doing unto others as we would have them do to us, 
or of loving others as we love ourselves. There was nothing 
wrong with the formula. Everybody must admit that, if gen- 
erally applied, it would have abolished war; and in so far as 
it was applied, it did abolish war. 

We make a mistake if we think it was not applied at all. 
Everybody, almost, applied it more or less, and everybody 
generally still applies it more or less. 

It was quite generally applied, for instance, within the 
ancient institution of the family. Not universally, for there 
were families whose members did not stick together through 


thick and thin. The rule, however, was that people should 
think as much of their family's interests as they did of their 
own individual interests, so they not only worked for their 
families but they gave up their own lives, on occasion, to 
protect their families. 

When people did this, they were not considered prodigies 
of goodness. It was looked upon as the natural thing to do. If 
people did not customarily do it, in fact, the institution of 
the family could not have survived; and without the institu- 
tion of the family, the individual would have had a very hard 
time. He sacrificed himself for the family, in the long run, 
because the family was worth sacrificing for. It required no 
fundamental unselfishness on his part; all it required was 
enlightened selfishness. And this eventually became so estab- 
lished in tradition that almost everybody who felt that his 
family was being attacked or insulted resented it quite as 
instinctively, it seemed, as if he himself had been attacked or 
insulted. In other words, he adopted and applied the Golden 
Rule, as far as his own immediate family was concerned. 
He did unto the other members generally as he wanted them 
to do unto him, and he learned to love them much in the 
same way that he loved himself. Of course, there were bicker- 
ings and disagreements and petty quarrels; but wherever the 
institution of the family was the dominant institution, and 
one had to choose between living in the family and facing a 
world of enemies all alone, these quarrels were seldom very 
serious. Not until individuals could find refuge in some 
other social institutions, such as the state, or bandit crews, 
were people likely to turn against their own families, and 
even then they didn't do it very often. 

Of course, the family is not holding together in that way 
today, but that is because it doesn't have to. Individuals can 
live outside their families now, and they can prosper without 
any special cooperation on the part of their biological kin. 


But they do not and can not prosper if they turn against 
their own side; they must cooperate with those upon whose 
cooperation their individual welfare depends. They must 
act toward these persons essentially in the spirit of the 
Golden Rule, regardless of whether their common aim be 
good or evil. They may join a criminal gang; but to survive, 
they must be true to the gang and be ready, if necessary, to 
lay down their lives for it. 

It is neither difficult nor unnatural to apply the Golden 
Rule. The difficulty lies entirely in the existing social set-up. 
One could not love his family before there were families. 
He could not love his country before there were countries to 
be loved. After the demands of trade made it necessary for 
people to organize in states, it became possible without any 
change whatever in human nature, for ordinary human 
beings to so identify their own interests with the interests of 
the state, that they would, if necessary, die for it. 

The problem of world peace, then, is not a problem of 
changing human nature so that people will no longer act 
as human beings act. It is a problem rather of changing 
human organization so that people will act naturally toward 
all other people as they naturally do act toward those whom 
they recognize as their own. It is much more than a prob- 
lem of creating a world state, for states, while they may 
succeed in stirring their citizens to great bursts of patriotism 
at times, are likely themselves to be the victims of conflict- 
ing interests. The state never could command the constant, 
everyday loyalty on the part of the average citizen which 
the institution of the family commanded from all its mem- 
bers. The state, both in war and peace, has been the prey of 
self-seekers and grafters and those with axes to grind. 
Whether a government could retain its power or not has 
often depended, not upon how good or how bad the govern- 
ment was, but upon whether or not its people were pros- 


perous; and the state was never in a position which would 
enable it to control prosperity. 

The state, it must be remembered, was not organized to 
produce and distribute wealth to all its citizens, as the family 
produced and distributed wealth among its various mem- 
bers. Socialists have set up the theory that this should be the 
function of the state, but no socialist will claim that it was. 
States left production where they found it under the direc- 
tion of families for the benefit of their own members and 
addressed themselves principally to the problems of trade; 
and trade, as everybody visualized it, while it was more and 
more necessary from everybody's standpoint, was not a 
process by which families were trying to enrich each other 
but a process by which people were trying to get the best 
of each other. 

So long as business, then, continued to be such a process, 
political states had to be organized for war. The fact that war 
was eventually discovered to be unprofitable could not 
change this. Business had to go on, and the profitable way 
of doing business, as everybody supposed, was to get the best 
of some one else. 

In 1914, practically everybody wanted peace and prac- 
tically everybody had become convinced that war was cruel, 
wasteful, inglorious and stupid. But practically everybody 
went to war just the same, for forces beyond their control 
swept them into it. 

What was this force? First, it was trade. Secondly, the tra- 
ditional opinion of what trade had to be the fixed notion 
that trade was a process of making profits out of somebody 
else. No nation could get along without trade; and the busi- 
ness interests of every nation were trying to get the best of 
the business interests of every other nation. Each business in- 
terest, to be sure, was likewise trying to get the best of other 
interests within the same nation; but each nation had its laws 


to keep such rivalry from getting out of bounds. However, 
there was no world law. And even if there had been, there 
was no world police force, and no world army and navy, no 
world sanctions, to see that the law of the world should be 
enforced. Not only was there no such thing but no wish for 
such a thing: the very idea was generally abhorrent. Much 
of the world was in fact crying out against the tyranny of 
empires, and the idea that the whole world should be here- 
after subject to the political decrees of one central body went 
against almost everybody's love of liberty. 

Occasionally some theorist might argue for such an 
arrangement, but even if war were the only alternative, he 
could not gain many converts. Even after the World War, 
and after its cost and its futility had become apparent, such 
an enlightened and peace loving country as the United States 
refused to join the League of Nations for fear that it theo- 
retically might attempt to encroach upon national sover- 
eignty. One does not have to agree with this decision to rec- 
ognize the force behind it, and to lose faith in a world 
political government as an effective guarantee of world 

Since 1914, however, the whole situation has changed; not 
because political government has demonstrated any special 
genius, but because business has discovered certain facts 
about itself. 

It has been discovered that trade is more successful when 
no attempt is made to get the best of anybody else; and it 
has been discovered that it is most successful when it utilizes 
all the resources of science so that it may bring the utmost 
possible benefits to everybody. 

Upon that discovery, there is something more than a hope 
for world peace. World peace has now become not only a 
practical possibility, but the logical outcome of successful 
business methods. True, there may be another world war 


before business generally will discover the principles upon 
which business success now depends: hence work for world 
peace must principally consist of helping the world to grasp 
and to apply these truths. 

It is not necessary, however, to theorize, nor to try to per- 
suade the world to give up methods of doing business which 
promise great financial rewards, and adopt some method 
which will assure world peace. All that is necessary is to 
follow the methods which have proved to be most profitable. 
These are the methods of mass production and mass dis- 
tribution, the fact-finding methods, the system which per- 
ceives that business can not sell more than consumers can 
buy, and which directs first attention, therefore, to the con- 
sumer's interests, the system which not merely finds markets, 
but creates markets by manufacturing and distributing buy- 
ing power, and thus translates the selfish human desire to 
conserve prosperity into an effective human determination 
to preserve peace. 

Mass production makes peace with everybody, even with 
its competitors. When success is based upon producing 
wealth for others (instead of taking it from others) , the more 
who succeed the greater will everybody's opportunities be. 
Mass production actually seeks the success of its competitors, 
for success, it knows, can come only from the use of better 
methods, and the use of better methods increases buying 
power and adds to the general prosperity. In the interna- 
tional field, therefore, it demands the success of other na- 
tions, so that their people shall become much better cus- 
tomers than the people of a commercially defeated nation 
could possibly be. 

Mass production, in a word, includes the whole world 
through serving the whole world. It does not, and it can not, 
leave anybody out of its benefits. It destroys antagonism on 
the part of consumers by making prices as low as possible, 


and on the part of workers by making wages as high as 
possible; and it undermines the whole incentive to war by 
making world exchange as profitable to everybody as it can 
possibly be. It is destructive only of the fears and hatreds and 
traditions which keep human beings from cooperating. It 
does not change human nature, but it is giving selfish hu- 
man nature an opportunity, which could never be clearly 
seen before, to express its selfishness in profitable coopera- 



MASS production demands the education of the masses. 
That is a large order. Doubtless it will be many years 
before it can be filled, for the education which is needed is 
not one which our educational institutions are at present 
equipped to give, and it will necessitate the teaching of 
many things which the teachers do not yet know. 

In the first place, the masses must learn how to behave 
like human beings in a mass production world. No one yet 
knows how to do that. All of us have learned something 
about how to behave in a family civilization, in an agricul- 
tural civilization and in different kinds of class civilizations; 
but the machine civilization into which we are all moving, 
a civilization which is rapidly erasing so many of the old 
relationships of life and bringing the whole world into one 
social body, remains to be explored. This civilization is 
founded upon production for the masses, but unless the 
masses play a conscious part in it, production for the masses 
can not go on. 

It is necessary, for illustration, that unemployment be 
abolished and that the masses everywhere be freed from the 
fear of losing their jobs and hence their economic security. 
But how will workingmen behave if they are freed from this 
fear? Plainly, we do not know. We can only theorize about 
it, for it is a condition which has never existed since the 
beginning of industrialism. To be sure, the serfs were not 
afraid of losing their jobs, slaves were not afraid of being 
thrown out of work, and the members of the old patriarchal 
families felt economically secure as long as the family was 
enjoying prosperity, whether they individually were good, 



efficient workers or not. The masses of industrial workers 
today, however, are neither slaves nor serfs nor members of 
agrarian clans. In the main, they work because they have to 
work; and they work faithfully, among other reasons, be- 
cause, if they do not work faithfully, there is always the pos- 
sibility that some more faithful worker will be substituted 
in their place. 

Would they work as faithfully if they were suddenly in- 
formed that they could not be discharged, and that the worst 
that could happen to them economically would be their 
transfer to some other job or to some other industry? Would 
there not be a tendency for them to lie down on the job, to 
take things easy, and thus to destroy the very system which 
makes it imperative to abolish unemployment? 

Obviously, there would be such a tendency unless the 
masses were thoroughly educated to understand the situa- 
tion. But there is little, if any, such education today. It is 
not being given in the home, for the average home, no mat- 
ter how well equipped to teach the traditional virtues, is 
not equipped to interpret to its children the social relation- 
ships of the world in which those children must soon begin 
to do their part, and the social responsibilities which come 
from those relationships. 

To suggest that the principles of mass production should 
be taught in the primary and elementary schools will strike 
most readers as fantastic. The average school teacher knows 
little or nothing about those principles, and is not required 
to understand anything about them, although they are the 
principles upon which human society is now being con- 
structed, and principles which must be grasped if these chil- 
dren are to learn how to behave like human beings in this 
mass production world. 

The schools do their best to teach patriotism loyalty to 
the political state. We could not maintain our status as a 


nation if they did not do so. Merely teaching children to 
be loyal in some abstract sense would never meet the re- 
quirement. They must be made to understand, even in their 
immaturity, that they have special obligations toward their 
own country. The children, incidentally, do not object. 
They like it. Loyalty comes natural to them, when it is once 
made plain that they have a country and a flag, and that this 
human group which we call the nation is really their group. 
If they had never heard of such an institution as a country, 
however, they could not be loyal to it. They might be ever 
so good children. They might be loyal to their fathers and 
mothers. They might be loyal to every human group of 
which they felt themselves a part. But the nation in distress 
would have no meaning for them. A call to sacrifice for their 
country's sake must then go unheeded. They might be 
herded by force, to be sure, into military formation, and they 
might be employed as cannon fodder to achieve some polit- 
ical end, but they could not become good citizens or good 
soldiers, because of a fatal flaw in their education. Under 
such circumstances America, as we know it, could not exist. 
But what are the schools doing to interpret the machine 
civilization the new grouping of human life which can not 
leave anybody out and which renders even the old patriotism 
inadequate to cope with social problems now? To say that 
they are doing nothing is not quite true. Inevitably, business 
and industrial changes are being reflected to some extent in 
our educational programs. There are sporadic movements 
here and there to make education more practical, and to 
train more of our young people for business leadership. It 
has become generally understood that more fact-finders are 
needed, and the old classical curriculum is giving way to 
more and more emphasis upon scientific research. But the 
situation is all confusion. There is rather a general recogni- 
tion that we have begun to live in a machine civilization, but 


the problem of how to live in a machine civilization is hardly 
yet being discussed. The question of how to behave like 
human beings is getting considerable attention; but not the 
problem of how to behave like human beings in the specific 
social set-up in which those human beings will have to live. 

But mass education must come. Mass production demands 
it. There must not only be these new relationships of life, 
but there must be an understanding of them. In this machine 
civilization, the masses must be taken into full citizenship. 
They must achieve, not mere literacy, but culture; and it 
must be a culture based upon fact-finding instead of upon 
the class traditions of the past. 

The masses will presently come into wealth and leisure. 
Without wealth and leisure little culture is possible, but 
until the days of the machine, the only possible wealth and 
leisure, and, therefore, the only possible culture, were the 
wealth and leisure and culture of special privilege. These 
could not be based upon fact-finding. They were frequently 
more secure, indeed, if the facts were well concealed and the 
fiction of the divine right of rulers to rule were emphasized 

In the old class societies, it was not necessary that the 
masses be educated. It was not even advisable. It was far 
better that they be merely trained. Had they understood how 
they were being exploited, they might easily have done away 
with such exploitation; but since they did not know how to 
create wealth and leisure for all, any revolution which they 
might have inaugurated must still have resulted in poverty 
and unremitting toil for all. Since many must live crude, 
uncultured lives, it may seem just that all should do so; 
but the price of such justice must not be forgotten. Under 
such conditions, humanity could not have developed art 
and culture and scholarship. It required leisure, at a period 
when only a very few could possibly have had leisure, to 


develop the very things we now care for most. This leisure, 
however, was based upon cruelty and injustice to the masses; 
and it could be sustained only if the masses were trained to 
submit to cruelty and injustice. Such training, socially neces- 
sary as it may have been, must not be confused with educa- 
tion. Education consists of the drawing out of human capac- 
ities. Training may consist only of curbing them. 

Training is still necessary, but something more than train- 
ing is needed now. Children must be trained not to run 
in front of motor cars, regardless of what they may think of 
their individual right to do so. They must be trained to eat 
the things that will not injure them, in spite of individual 
preferences for something else. Adults must similarly be 
trained. They must be trained to regard the traffic regula- 
tions, to respect the property of others, to obey the law, to 
meet their obligations and to live generally in such a way 
that others may live also. But all this training, while neces- 
sary to social stability, is not education. It is all negative. 
It consists of information as to what we must not do. It does 
not draw out and develop the hitherto undeveloped capaci- 
ties of human life. At best, it leaves human life largely where 
it was before. It does not and it can not bring progress. 

The bees and the ants have a marvellous civilization. 
Their systems seem to work today as well as they did a thou- 
sand generations ago. But there has been no improvement. 
Their lives, apparently, are no larger than they ever were. 
They are doing the same old things in the same old way. I 
do not know, of course, what arguments they may have, but 
the conservatives are evidently in power. One can not help 
admiring such a perfect social mechanism. On the other 
hand, there is something to be said for human life, whose 
civilizations are forever breaking down, whose habits won't 
stay put. Humans, apparently, never become perfectly 
trained. They will not admit their limitations. They fail and 


fail and try again; and when they get what they go after, 
they are filled with discontent and forthwith go after some- 
thing different. Plainly, they don't know what they want, 
but they want it terribly. It is the search for this something 
beyond experience which draws them out which consti- 
tutes their education. 

Education, therefore, is something more than fact-finding. 
Education involves thinking dealing with the facts which 
are found. Millions doubtless saw apples fall before Newton 
observed the phenomenon. But the millions didn't do any- 
thing about it. Newton proceeded to think about the fact 
which he had found and his thinking enlarged the boun- 
daries of human life. Einstein, by the same process, has again 
enlarged those boundaries. Not every fact-finder, by any 
means, does this. And not every thinker. Fact-finders who 
think traditionally will simply arrange the facts as far as 
possible into the traditional patterns; and all facts which do 
not fit into the traditional patterns are simply thrown away. 
These are the people who "learn the ropes," and who imag- 
ine that they are keeping up-to-date by the process of dis- 
covering what is and isn't done. There are many thinkers, 
on the other hand, who weave weird intellectual patterns, 
and even construct Utopias, which human beings, because 
they are what they are, can never use. They may be quite in- 
genious thinkers too, the only trouble being that their think- 
ing does not deal with facts. 

What is needed now, in this new world of mass produc- 
tion, is not mere thinking and not mere fact-finding, but 
thinking along fact-finding lines. 

Mere thinking, by itself, may lead anywhere. Sometimes 
it leads to the insane asylum. And mere fact-finding, by 
itself, may lead to nothing more than more tables of statistics 
and the erection of more filing cabinets in which to bury 
them. Only fact-finding plus straight thinking will serve the 


present need. The time has come, in fact, when the masses 
must learn how to think. 

Mass production, it must be remembered, is not a system 
to be installed, with such and such appropriations for up- 
keep. It is a social revolution. It is production for the masses, 
for the first time in human history, and this is a form of 
production which, because of its constantly increasing capac- 
ity, must, if understood and operated scientifically, abolish 
poverty and drudgery and the fear of unemployment and 
all the discipline which has historically been founded upon 
these things. 

To operate this social mechanism scientifically, however, 
requires more than a formula in the possession of a few 
great executives. It requires a new attitude toward society, 
on the part of business men and of workers alike. It does not 
require any change in human nature, but it does require a 
new understanding of what human nature is. It requires, for 
one thing, such a social concept as man has never had before. 
It requires a sense of change and of evolution to replace the 
old notion of a world standing still, in which the right and 
wrong of everything was long ago established and goodness 
consisted of following the formulas which were handed 

Merely the operation of this mechanism of mass produc- 
tion, then, requires a new education. But that is only a part 
of the problem. How shall the masses use the wealth and 
leisure and security which mass production will bring to 
them? To use it according to the old standards will never do 
at all, for all that would then result at best would be wealth 
and leisure and security, which might easily prove more 
boresome in the end than hustling to stay alive. 

It must be apparent that a great new education is neces- 
sary, and for the first time in human history, the masses can 
be educated. In an opinion governed world, in a society 


based upon special privilege, the luxury of thinking had to 
be reserved for a very few. 

For one thing, opinionated men who think are almost 
certain to reach wrong conclusions. Those who don't think, 
to be sure, are equally likely to reach wrong conclusions; 
but in a world governed by opinion, they had one advantage. 
Those who did not think could at least all reach the same 
conclusion, and concerted action was therefore possible. All 
could go to the same church. All could recognize the same 
king. All could and generally did obey the same orders and 
society, therefore, held together. 

What to do when there were two opinions competing for 
popular acceptance was always a problem. This led to fierce 
debate; but since fact-finding was not yet in vogue, there 
was no way of ending the debate except by appealing to 
authority, and the only way the authorities could put an end 
to a debate was through putting an end to at least one of 
the debaters. The debater then who displeased the authori- 
ties most was hanged or burned or cut to pieces, as the case 
might be, and the integrity of society was once more pre- 

We of today may look upon such practices with horror. 
But it is hard to see how they could have been avoided in a 
world governed by opinion. Orthodoxy has more to com- 
mend it than heretics are likely to concede. It is true that 
we owe all intellectual advance to our heretics, but we owe 
our social stability, in all previous periods of history, to those 
whose principal business it was to stamp out heresy. The 
opinion of the dissenter, to be sure, might be a vast improve- 
ment upon the opinion of the tribunal which decreed his 
death. Nevertheless, in a world governed by opinion, every- 
body could not dissent from everybody else and act accord- 
ing to some opinion of his own. Not until the age of science, 
not until the technique of fact-finding had actually been de- 


veloped, was it ever socially possible to permit the masses to 

It is little wonder, then, that so few people do any real 
thinking as yet. The same forces, however, which once made 
thinking impossible are now making it necessary the forces 
of social evolution. In a world governed by authority, it 
was necessary that we reverence authority; and the divine 
right of those who could get themselves obeyed was not quite 
such an absurd fiction as it sometimes seems. In a world gov- 
erned by fact-finding, however, it is necessary that we learn 
to reverence the facts; and although we may make many 
errors, a genuine reverence for facts will keep us thinking in 
harmony with the world in which we live, instead of chasing 
the vagaries which our minds must surely chase if there is 
no standard by which we may check up upon our thoughts. 

Henry Ford put a bookful of wisdom into a single sentence 
when he said: "We may ordain a man to be a bishop, but we 
can not ordain one to become an electrician; to become an 
electrician, it is necessary to learn how electricity acts." This 
mass production world has arrived. Inevitably, we must live 
in it, and, inevitably, we must all participate in its material 
advantages more wealth, more leisure, less soul deadening 
toil. But how about the larger human life which this new 
world makes possible? That is a problem for each of us to do 
his share in solving. In order to solve it, we must find out 
how mass production works. We must discover that it in- 
volves a complete human revolution an entirely new atti- 
tude toward life, and an attitude which can not be discov- 
ered except by finding and dealing with the facts. 

I do not pretend to know how far this change will go to 
what extent practices which were once considered sinful 
may now be taken up constructively, nor to what extent 
things once considered honorable will now appear as morally 
repugnant. But I do know that there must be a change on 


every human front, and that the change will be guided, 
neither by orthodox tradition nor by mere emotional re- 
bellion against social discipline, but by finding and dealing 
with the facts. There is little, if anything, in our traditions 
which will help us solve these problems; and just as it was 
once necessary for man to curb his animal instincts and learn 
to follow human codes, it will now become necessary for 
man to set aside his traditional drives and discover how to 
behave like a human being in this new fact-finding world. 

No one will claim that our existing educational institu- 
tions are equipped to meet this new human need. They have, 
to be sure, inaugurated many changes. They are teaching 
business. They are cooperating to a larger and larger extent 
with modern industry and, through modern research 
methods, they are learning many new facts, not merely in 
the physical sciences but in psychology and sociology. But 
one must be very optimistic indeed to believe that the 
schools, either elementary or advanced, are actually initiat- 
ing their students into the meaning of modern life or equip- 
ping them to play a significant human role in this mass pro- 
duction world. 

Many worthy educators, in fact, resent the encroachment 
of commercialism upon our educational institutions. They 
can not forget that many millionaires (who became million- 
aires because in a world still governed by opinion, their 
business opinions were better than the opinions of their 
competitors) have endowed colleges and other institutions 
for the purpose, apparently, of getting their opinions per- 
petuated; and they can not forget that there is little aca- 
demic freedom in such institutions, and that there is not 
likely to be until some excellent funerals take place. One 
can understand these fears, and perceive their justification, 
but they do not apply to the conditions of today. Mod- 
ern business, at least, is based upon fact-finding; and the 


modern successful business leader knows that disagreeable 
facts are as necessary in his business as are the other kind. 
He does not, therefore, want "yes men," either in his busi- 
ness organization or in the schools; and if he is a director of 
a college or university which is faced with any problem, he 
may generally be depended upon to bring, not his traditional 
opinion, but his technique as a fact-finder to the solution of 
the problem. This, surely, is in line with the greatest pos- 
sible academic freedom, unless one believes that his academic 
freedom should include freedom to ignore the facts. 

It is not commercialism, then, but traditional thinking, 
which is most severely handicapping our educational efforts. 
This is fortunate, for it is possible, even if difficult, to aban- 
don traditions, while it is utterly impossible to escape from 
the necessity for food, shelter and clothing, which are now 
provided through industry and commerce. 

In the days when the family was the world's economic in- 
stitution, the needs of the family dominated such education 
as there was. The masses, to be sure, were kept illiterate, but 
they were, at least, initiated into the mysteries of how so- 
ciety held together and how the work of the world was being 
done. The bulk of this work was done in the home, and 
when a boy had mastered what the home had to teach him, 
he had learned how to behave like a human being in the 
world in which he was sure to live. He learned both the 
principles and the technique. The modern home is expected 
by the thoughtless to do as much for the modern child, but 
only by the thoughtless. The work of the world is no longer 
done in the home, and the average home has scarcely heard 
of the system by which it is being done. 

As trade developed, and a class society superseded the old 
clan society, it became necessary to educate the classes to 
dominate, and to train the masses to accept their domination; 
and, everything considered, the job was done quite thor- 


oughly. A few were permitted to think, and to decide what 
others should think; and he who read the books which con- 
tained these thoughts was called "well read." There were 
not many such books, and they could all be mastered in a 
lifetime, if one had a lifetime free to devote to them. 

Then the age of science dawned and, eventually, the in- 
vention of power machinery. This necessitated the breaking 
down of the old class order, but it did not and could not 
mean that its traditions should be suddenly uprooted. Men 
achieved wealth and leisure in a new way now, and would 
not permit the traditional class system to keep them from 
getting it; but after they got it, they longed for the special 
distinctions which went with wealth and leisure under the 
old class order. The capitalists tried to ape the feudal lords 
whom they had overthrown. They couldn't quite do it, but 
there was nothing to prevent them, they thought, from send- 
ing their sons and daughters to institutions where they could 
acquire culture and education. Those who could afford to, 
then, went to college and learned Latin and Greek, and 
studied the precepts and principles of civilizations in which 
they were certain not to live, and which did not apply very 
well to the things which they would find it necessary to do. 

This new system needed multitudes of workers. It needed 
not merely skillful artisans, but men who could be trained to 
work in altogether new ways. It also needed foremen and 
managers and record keepers. It was finally decided to make 
"education" universal. Everybody, at least, might learn 
readin', 'ritin' and 'rithmetic. But this was "book learn- 
ing" and book learning, if one had enough of it, traditionally 
meant distinction. So high schools for the masses came, and 
colleges for all who could make the grade. When attempts 
were made to substitute more practical education instead, 
the masses themselves were likely to complain. They knew 
nothing about mass education and did not want it. Educa- 


tion traditionally meant distinction, and each family wanted 
its own children to become specially distinguished. 

Incidentally, it was no longer possible for anyone to be- 
come well read. There were too many books now for any- 
body to master. Science had dug up more knowledge than 
anyone could get into his head, and the need of the times, 
moreover, was not for men who had a mass of unassorted 
knowledge in their heads, but for men who could organize 
things so that each could use his special knowledge in some 
social and socially constructive task. 

Trade and technical schools could hardly fill the bill. 
Trade schools might train their students in the ways in 
which specific things were customarily done; but by the 
time those students had graduated, it was found, fact-finders 
in the factories had discovered better ways, and this "practi- 
cal education" was as impractical often as Latin and Greek. 
Especially when mass production came, it became apparent 
that thinkers were needed, instead of persons trained to do 
anything in any specific way. 

Superficial observers, of course, said that mass production 
methods required no brains at all. They said that only 
robots were now needed, since all the skilled work was now 
being done by machines and that men were reduced to the 
monotonous repetition of the few motions necessary in tend- 
ing a machine. They failed to note that it requires thinkers 
to construct such machines; and that, as the process develops, 
the machine tender is supplanted by another machine and 
that dull, monotonous tasks are fast being eliminated from 
human life. An old-style industrial plant might employ five 
thousand operators and five engineers, while a modern plant 
may produce the same output with five hundred operators 
and fifty engineers. The completely automatic factory that 
is, automatic except for the highly professional and humanly 
fascinating work of superintending and improving it is 


almost here. It waits only the development of more skill, 
more engineering, and the liberation of the masses from their 
status as burden bearers and underlings to that of intelligent, 
conscious, creative minds cooperating in the control of their 
economic mechanism. 

One of the first half-conscious reactions to this new situa- 
tion is seen in the great mass movement toward our colleges 
and universities. But traditional education, it is obvious, 
is not what people really want. It can not answer their need, 
either intellectually or morally, for it can not interpret this 
new machine civilization, and it can not therefore make its 
responsibilities clear. 

The time has come when all our educational institutions, 
from the primary schools up, must concentrate on the great 
social task of teaching the masses not what to think but how 
to think, and thus to find out how to behave like human 
beings in this machine age. This teaching, of course, should 
begin in the home; but it can begin in the home only when 
parents are sufficiently educated to begin it. I do not mini- 
mize the task. Even to get it started will require every con- 
tribution that every sincere educator can make, and all the 
help that every fact-finding business leader can give them. 
But the task is glorious. Its accomplishment will mean not 
merely the completion of the machine civilization upon the 
fundamental principle of service to the masses, but the prepa- 
ration of the masses to live in it. 


THIS machine age is frequently referred to as an age of 
waning faith. Religion, it is often said, is losing 
ground. The old beliefs no longer hold, and things which 
were once held so sacred as to be almost unmentionable are 
now subjects of ruthless investigation or even of light dis- 

In fifty years, for instance, America has been transformed 
from an orthodox, churchgoing population, in which the 
dogma of eternal punishment for the masses was quite gen- 
erally accepted, into a relatively light-hearted, pleasure seek- 
ing people who generally spend their Sundays motoring and 
to whom the very word "hell" usually has a comic connota- 
tion. Many are so alarmed at this that they compare modern 
America with Rome and with Babylon, and seem almost to 
be praying for its immediate fall. The churches of America, 
however, instead of joining in this cry, seem on the whole to 
be sounding a much more gladsome note. It can not be said 
that they are frivolous. They are discussing serious social 
problems, and they are working earnestly for a better world. 
But they are not preaching hell and damnation for the 
masses, and offering to the chosen few an escape from the 
wrath to come. There is relatively little insistence now, in 
the very strongholds of theology, upon a literal acceptance of 
the ancient texts. The modern seminaries do not teach aspir- 
ing clergymen that Genesis is the one true guide to geology 
and biology and astronomy. They want reasonably intelli- 
gent recruits for the modern ministry, and they know they 
could not get them if they were to take any such stand as 
that. The change that has come over America seems to have 



affected the churches and the religious leaders of America 
quite as much as it has affected the rest of the population. 

But does it mean any waning of religion? If religion con- 
sists in holding rigorously to certain theories, regardless of 
the facts, we must answer yes. But that theory of religion 
is not held as extensively as it was fifty years ago; and when 
one considers the history of religious movements, one won- 
ders how it ever came to be held at all. 

The great periods of religious advance were surely not the 
periods in which the ancient concepts were most rigorously 
held; they were the periods in which the ancient concepts 
were most rapidly replaced by concepts which fitted more 
nearly into the needs of the times. The advance of Christian- 
ity was most decidedly a decline of orthodoxy; for if every- 
one had stuck to the teachings which he received at his 
mother's knee, he would surely have rejected the new teach- 
ings. All missionary movements have been revolutionary and 
intentionally so; it has been their object to supplant prevail- 
ing notions with ideas which would suit the situation better. 
The missionaries may have supposed, of course, while they 
were engaging in this re-education of whole peoples, that 
they themselves had come into possession of all the truth 
there was, and of all there ever would be, and that the for- 
mulas which they were now handing down could never be 
amended or improved. But that is merely an observation as 
to what many people who have come upon great new living 
truths are likely to suppose. Whatever they thought about 
the nature of their particular creed, it must still have been 
obvious that it could make no progress in the world except- 
ing as old beliefs were given up. 

The fact, then, that the people of the machine era are 
giving up their ancient theories about God or immortality, 
can not in itself indicate any religious deterioration. It would 
indicate merely a deterioration of orthodoxy, a deteriora- 


tion which is one of the essential factors of any religious 

Just what is happening as a result of this change is still 
a matter of opinion, as we have not yet got around to mak- 
ing it a matter of fact. The value, for instance, of a general 
belief in eternal punishment has not been the subject, so 
far as I know, of any exhaustive and impartial inquiry. There 
are indications that it makes a people rather somber, even 
if it doesn't make them behave; but whether or not it in- 
hibits them from whole-hearted cooperation in making this 
world better is a matter upon which we have few if any 

As to why much of the old belief was given up, and given 
up at this particular time, I have just a bare suggestion. I 
think it was due to machine production. Before the days of 
capitalism, the world was divided largely into small com- 
munities which had relatively little intercourse with one 
another. Under such circumstances, people might acquire an 
intense love for the members of their own little communi- 
ties, but love of humanity, particularly for the great, alien 
masses, would be most unlikely. They could not love out- 
siders, or recognize responsibilities toward them, for the sim- 
ple reason that they visualized them as outsiders. Their only 
relation to them was a relation of fear and dread; and each 
little group would have felt much more at ease (or supposed 
it would) if all the alien groups were destroyed. 

Each group had its god. How big any god was depended 
upon the extent to which actual human relations had been 
developed. When two groups fought for supremacy, their 
gods fought. When two or more groups amalgamated for mu- 
tual protection, and thus enlarged the social set-up, their 
gods merged. When trade expanded to such an extent that 
every part of the whole known world came into some sort of 


communication with every other part, the idea of one al- 
mighty god was born. 

Some historians claim that the increasing commercial in- 
tercourse in the days of the Roman Empire, and the neces- 
sary migrations of great masses of workers from one part of 
the Empire to another, were responsible for the rise of Chris- 
tianity. The old gods were local, it is pointed out, and had 
to be carried around, while the god who was now offered 
to the masses was one who could be depended upon to be 
present anywhere, no matter if one lost his baggage en route. 
I am not qualified to express any opinion as to that. It is 
obvious, however, that worship everywhere has been condi- 
tioned by the worshiper's concept of his human relations. 
Even in the late war, while it may have been thoretically con- 
ceded that the same god was presiding over all the world, 
one group of Christians visualized a god who had the spe- 
cial interests of Germany at heart, while the others pictured 
a god who was definitely lined up with the cause of the 

Even the theoretical acceptance of one god, then, has not 
meant actual and practical acceptance of the idea. This is 
not strange; for, while looking at the matter from one point 
of view, human relations seemed to be all inclusive, yet one's 
actual life was always largely taken up with a very limited 
set of human relations. The theoretical monotheist, then, 
had little difficulty in imagining that the god of the whole 
universe was specially and peculiarly concerned with his im- 
mediate affairs and would, upon occasion, suspend natural 
law itself to help him out of his personal difficulties. 

Even in modern times, when the concept of God as a 
mere local deity had become well-nigh impossible, hun- 
dreds of separate denominations sprang up, all professing to 
worship the same god and all actually accepting the same 


Holy Writ, but each devoutly believing that God was to 
some degree at least displeased with the sort of worship he 
was receiving from all the other denominations, while pecu- 
liarly attentive to the worship given by the sect with which 
one, probably by the accident of birth, happened to be affili- 
ated. This narrow denominationalism, to be sure, faded out 
in time; but it is worth noting that it faded out first in the 
larger industrial communities, where people were forced to 
learn how to live with other people whose traditional stand- 
ards might be vastly different from their own, and last in 
the more remote hill countries where one could still visualize 
the little group of homogeneous neighbors as the sum total 
of his human relations. 

The word "god," in other words, has usually served as a 
symbol of one's personal universe that is, his actual social 
set-up; and all who are not visualized as being in that social 
set-up are assumed to be "cut off from God" and in the realm 
of outer darkness. When the family god was all the god 
which one knew anything about, one worshipped his family 
god and, figuratively, let the rest of the world go to hell. Es- 
sentially the same may be said of the worshippers of tribal 
gods, or national gods, or of any god who is worshipped by 
anyone who can not sense his vital relationship to all hu- 

In the days when the masses of the earth lived in small 
communities, and these communities were either indepen- 
dent of each other, or so nearly so that their mutual depen- 
dence was not recognized, the masses generally were in outer 
darkness, or hell, as far as the average person's religious con- 
cept was concerned. With the coming of capitalism and 
machine industry, however, these communities were brought 
together so vitally that this local notion became harder and 
harder to maintain. It was not immediately superseded, how- 
ever, and for very understandable reasons, by any passionate 


devotion to all humanity, symbolized by the worship of one 
universal deity. 

The idea of one God, the Father of all, had become fixed 
in the creeds, but the feeling which such a concept might be 
supposed to arouse was by no means common. Actual condi- 
tions, in fact, seemed to generate a very different feeling. 
While capitalism destroyed provincialism to a great extent, 
it substituted a sense of individualism. Instead of becoming 
devoted to a larger community, then, the tendency was for 
people to become less devoted to their mere geographical 
community and more devoted to their personal ambitions. It 
seemed to many that Almighty God had been dethroned by 
the Almighty Dollar; but the concept which was actually 
dethroned was not the concept of a God who had brought 
the whole human family into loving unity, but of a God 
who was particularly partial to the worshipper's one little 

Under the ministrations of capitalism, moreover, the 
masses were in all kinds of hell. They were in the hell of 
poverty, and it was a hell from which the masses had no 
promise of escape. Individuals here and there might escape 
(capitalism held out that promise) , and so many individuals 
did escape that the masses put up with capitalism. The old 
fixed class lines were broken. All workers, no matter how 
poor, did not have to remain in the working class. If one 
demonstrated peculiar ability, or had a peculiar run of luck, 
he might climb out of his class and into a position where 
the miserable workers would be working for him. But all 
the workers could not do this: capitalism could not promise 
anything like that. The masses of them, it seemed, must still 
be eternally doomed to poverty. Human life, as it was now 
visualized, was an individual struggle, and the only goal that 
one could hope for was the survival of the fittest. With such 
a concept of his actual human relations, it was still quite 


easy for the average American to believe in eternal torment 
and eternal failure for the masses of mankind. 

It was not at all necessary for him to believe that those 
who succeeded in this world would succeed in the next. He 
might believe the exact opposite. He might set up a defence 
mechanism for his own failure, and attribute it to his wor- 
shipping God instead of Mammon. It might please him to 
believe that the successful in this world's struggle would be 
punished forever and ever; and if the churches had only 
been able to capitalize this attitude, they might have main- 
tained a more enthusiastic following. 

But the religious institutions could not do this. Money 
was needed to sustain these institutions, and it was the suc- 
cessful, not the unsuccessful, who had the money. Large 
masses, presently, were alienated from the church, as leading 
capitalists contributed to its support. Agitators claimed that 
the churches had sold out to Mammon; and the churches 
generally, it must be said, contributed something to this in- 
dictment. When labor troubles arose, the churches said 
much about property rights and the sin of covetousness, but 
little about the iniquities of low wages, long workdays or 

Capitalism, however, while it ruthlessly broke up the old 
social order, did not evolve in the direction of individual- 
ism or of the extermination of the weak. What it actually 
did was to set up new human relationships and man was 
left to grope blindly for some way to express life in accord- 
ance with this new and unfamiliar set-up. 

Instead of accepting the philosophy of the survival of the 
fittest, it became quite the fashion for successful capitalists 
to go in for charity, and to contribute what they could 
to achieve the survival of those who, by all these capitalistic 
measurements, had shown themselves to be unfit. Ruthless 
advocates of individualism, they still developed a sense of 


social responsibility. Not understanding the nature of the 
new social set-up, they were not able to discharge this re- 
sponsibility intelligently, and so followed the traditions of 
charity instead; nevertheless, they endowed hospitals and 
colleges and libraries, which incalculably enlarged the scope 
of human relations and were intended to develop anything 
but an individualistic attitude. 

Moreover, no matter how they preached individualism, 
they would have none of it in their own business organiza- 
tions. In their factories and offices, all individual ambitions 
had to be subordinated to the company plan; and the em- 
ployee who was interested only in his own personal success 
was either discharged or passed by, in favor of one who had 
learned how to cooperate and how to develop a spirit of 

With the coming of scientific management, even the own- 
er's own opinions of how an industry should be run had to 
give way to some impersonal social plan. The owner was 
compelled to abandon his personal dictation of the busi- 
ness, according to his own whims and fancies, because, if he 
did not, he would be almost sure to lose his business to 
some competitor who did. This substitution of fact for 
opinion in the guidance of industry had many results, but 
its most important social result in America was such an 
increase in efficiency that the standard of living of the 
masses was greatly heightened, even before the advent of 
mass production. 

There were not many scientists yet in America, and not 
many who could be said to hold a scientific attitude. Never- 
theless, there was a wider and wider sensing of the fact that 
success follows scientific research, rather than pleas to some 
special providence, and there was an increasing abandon- 
ment either of church attendance or of the old churchgoing 
attitude. More important yet, perhaps, there was a growing 


realization of the fact that the masses of workers were not 
naturally doomed to eternal poverty, but, even though they 
remained workers, might aspire to a very comfortable and 
somewhat luxurious life. 

It was while this transition was occurring in America that 
the traditional belief in eternal hell gave way. Personally, I 
believe that the theological amendment was due to the 
economic change far more than to any debates among the 
theologians. Some theologians had long since rejected such 
a belief, and some sects had been organized, which stated 
positively that there was no eternal hell. But these sects 
were small and uninfluential, and they did not become large 
when the masses came to hold their point of view. The 
masses who still continued to attend church generally stuck 
to their traditional denominations, and often formally re- 
peated the traditional creeds which asserted the old-time 
belief in hell. But the old-time belief actually faded. Less 
and less was it a factor in the religious life of America, or 
in the character of the American people. 

Negatively this showed itself, no doubt, by the reaching 
out of many toward long prohibited sins, and also by an 
absorption in material things, instead of in contemplation 
of spiritual joys hereafter. But there were other and more 
positive results. More attention being paid to this world, 
more religious enthusiasm went in to improving its condi- 
tions. The churches themselves developed a social gospel, 
and emphasized it, sometimes, more than they emphasized 
eternal-life insurance. 

There was no sudden right-about-face. The churches did 
not meet in any general conclave and decide to abandon 
their traditional other-worldliness. Actual attempts to change 
the wording of the ancient creeds, in fact, met with little 
favor. Nevertheless, the religion of personal escape from hell, 
or of personal reward for virtue in the sweet by and by, 


was given less and less emphasis, and the "religion of ser- 
vice" was given more and more. 

The churches did not split on this issue. Neither faction, 
if they could be called factions, seemed to understand that 
it was an issue. The old-timers believed in social service, and 
believed that the redeemed would engage in it, while the 
new-timers, as a rule, did not take direct issue with the old- 
time formulas of personal redemption. Some of the most 
interesting social revolutions, however, occur in periods in 
which the forces which cause them are not at all clear, and 
the issues, therefore, not sharply drawn. 

What was really happening was that human relations were 
changing. The change was in the economic field, and few, if 
any, supposed that a mere economic change would necessi- 
tate any change in one's religious outlook. But just as the 
economic institution of the family had once established 
family relationships, and religion had once developed an 
appreciation of those relationships, religion now had the task 
of discovering and dealing with the relationships which the 
new economic change was setting up. 

Many, I know, will not concede that religion is a matter of 
human relationships at all. Naturally, I can not argue the 
point. I am simply forced to confess that I am not interested, 
and am incapable of becoming interested, in any religion 
which is apart from and independent of the life which hu- 
man beings must live. 

Once, when invited to address a gathering of the Federal 
Council of the Churches, in New York City, I felt no little 
embarrassment. I surely could not assume to tell these re- 
ligious leaders what religion was; and to get a Christian defi- 
nition of religion, I pored over the New Testament until 
I found a statement of Jesus which seemed to be basic but 
which, I confess, I could not understand. 

An ancient Jewish concept seemed to be that religion con- 


sisted of keeping a number of commandments, most of 
which began with "Thou shalt not." This concept, I knew, 
was not uniquely Jewish, for I had met numbers of church- 
men who seemed to measure their religion by the number 
of things they didn't do. It was not the concept of any re- 
ligious leader; it was the concept, rather, of institutionalism, 
of traditional thinkers of every age and of every school. 

In this Testament, however, He whom so many call "Mas- 
ter" emphasized an altogether different note. He proclaimed 
a religion of life and love. Not quarrelling with the "Thou 
shalt nots," He seemed to me to teach that they did not in 
themselves constitute religion, but that they were worth 
while only as they hung upon the principle of love. He gave 
two great commandments, each beginning "Thou shalt 
love"; and "on these two commandments," He said, "hang 
all the law and the prophets." 

One of those commandments, I confessed, I could not 
understand. It was: "Thou shalt love the Lord, thy God, 
with all thy heart, and with all thy mind, and with all thy 
strength." I did not object to it. I believed in God. It had 
seemed to me to be impossible to contemplate a universe of 
eternal law without becoming aware of an eternal power 
whose law can not pass away; but the contemplation of this 
power had never inspired me with that warm, personal, pas- 
sionate interest which I would call love, and I would have 
turned away cold if the Teacher had stopped right there. 

But He did not. He gave a second commandment: "Thou 
shalt love thy neighbor as thyself." This was interesting; and 
to me, the most interesting thing about it was the statement 
that it was "like unto" the first. In the mind of Jesus, appar- 
enly, the two commandments were identical. 

I could understand that second commandment, and I had 
no difficulty after all in talking with these Christian leaders. 
This commandment, in fact, embodies all the religion which 


I am able to comprehend. To me, then, religion is service; 
and if it is service to God, it is only that service which mani- 
fests itself in service to our fellow men. 

But that's business. That's modern, scientific production 
and distribution. It is not unselfishness, for it implies self- 
love. There wouldn't be much point in loving our neighbors 
as we love ourselves if we were utterly lacking in love for 
ourselves. All that is needed, apparently, is understanding, 
enlightenment, an appreciation of what our human relation- 
ships actually are. That, however, will require something 
more than mottoes and slogans and sacred texts. It will re- 
quire questioning, fact-finding, social and spiritual research. 

Religion, apparently, was other-worldly when there seemed 
to be no hope that this life could be made worth while. 
Heaven simply had to be located in some other world when, 
by no stretch of the imagination, could we build it here. 
The best we could do once was to build sanctuaries, places 
of refuge from one another; and there were always some 
aliens who were so utterly alien that they might even violate 
these sanctuaries. Why they were so alien, we could not 
know. We assumed that it was due to their natural depravity; 
and as a matter of fact, they were so depraved as to make 
the same assumption with regard to us. 

Wherever two warring groups discovered that they had 
great interests in common, however, it was always possible 
to stop the war. But in that case, they did not let each other 
alone. They cooperated; and out of this cooperation great 
new human values sprang. Eventually came machine indus- 
try and the discovery that the machine could work most suc- 
cessfully only if it gave maximum service to all concerned. 

This discovery compels us to see the whole world in an 
entirely new light. For this machine of mass production 
serves everybody. It can play no favorites. It compels even 
an international, instead of a narrowly national outlook. It 


can not tolerate poverty anywhere. Man's very weakness 
his very selfishness now causes him to insist upon the masses 
having the right and the power to buy what they want to 
buy. This in itself may not be religion, but it must lead to 
a great new religious awakening, and a religious experience 
such as humanity has never had an opportunity to know 

Just how the churches and religious institutions will func- 
tion in this awakening, it is, of course, impossible to say. 
That will depend entirely upon how aware they are of the 
changes which are actually occurring. If they do not under- 
stand the changes, obviously, they will be unable to inter- 
pret them; but human life must surely find its way to such 
an understanding, and those who lead us into the ways of 
understanding will be our real religious teachers, whatever 
religious institutionalism may do or fail to do. 

Let me give a homely illustration of what I mean by spir- 
itual fact-finding as distinguished from the traditional 
methods of teaching spiritual truths. 

Let us take the case, first, of a traditionally religious mer- 
chant who is earnestly trying to do something for the spirit- 
ual welfare of his employees. Being traditionally minded, 
he does not see any business necessity for paying high wages; 
and if he pays high wages, he does so because he considers 
it his Christian duty. He wants profits, however, or else he 
wouldn't be in business; and since he thinks that these 
wages come out of profits, he is, subconsciously at least, al- 
ways looking for some way by which he may discharge his 
full Christian duty without making wages any higher than 
he has to make them. His employees, he discovers, do not go 
in strongly for church attendance and do go regularly to the 
moving picture shows. These pictures, he thinks, are not 
elevating; and he wonders again (his desire for more profits 
helping him unconsciously to bring up the question) 


whether it is wise and right for him to enable them to spend 
so much money foolishly. Would it not be better to appro- 
priate some fund, he wonders, for welfare work? He may, 
for instance, install a reading room, where his employees 
may be uplifted by good but unattractive literature. He may 
even hire some whole-souled moralist to supervise their 
hours of rest and recreation. If he has any common sense at 
all, of course, he will not go very far in this direction, for 
his employees will naturally resent being regulated by his 
private whims; nevertheless, many business men, moved by 
a most unselfish desire to be good to their employees, do 
make them constantly uncomfortable at a great cost to the 
business and with no appreciable returns in spiritual im- 

Now, take the case of a hard-headed fact-finder, who wants 
profits quite as much as the other merchant, and who isn't 
thinking particularly of discharging any Christian duty. He 
knows, however, that it is good business to pay high wages, 
and he is always trying to find some way to make them 
higher. He knows that they can't be higher, of course, unless 
they sell more goods, and he is constantly seeking ways of 
attracting customers. The goods, then, must be the best 
values that he can offer and, to secure a sufficiently large 
number of sales, they must be at the lowest possible price. 

There is no misunderstanding such a man, no feeling that 
he is going to raise one's pay because one attends prayer- 
meeting regularly, nor cut it because one goes to the movies 
or smokes cigarettes. His store is just a machine for selling 
goods, and any saleswoman who can help it sell more goods 
is sure of her job, and of the highest wages which the old 
hard-head finds he is able to pay. He is no more concerned, 
apparently, with the religious life of his employees than he 
is with the religious life of some surgeon he may employ 
to perform an operation. He will not employ one who is 


intemperate; not because of any moral prejudice, however, 
but because he knows that neither surgery nor salesmanship 
mix well with intoxication. Nor will he employ a yes-man, 
or a yes-woman, if he can help it. Good merchandizing, he 
knows, requires good thinking; and employees who refuse to 
think, or even refuse to correct the boss when they find him 
thinking badly, are not of much use to a modern business 

From the old, traditional, religious point of view, such 
a man may seem to be a monster. But I am assuming that 
he understands modern mass production and mass distribu- 
tion, and let us see how his hard-headedness works out. 
Assume, for instance, that he is instructing a new sales- 

"In the first place," he tells her, "I want you to treat 
every customer as you would treat your own father or 
mother, if one of them came to your counter to make a pur- 
chase. You know, to begin with, that they haven't much 
money, and that it is to their interest to make what they do 
have go as far as possible. So help them find exactly what 
they want, and don't let them go away instead with some- 
thing which will not prove satisfactory. 

"If you have two things of equal value to sell, but at dif- 
ferent prices, give any of your customers the same good 
friendly tip that you would give your parents. If you treat 
them that way, they will come back again. And if you 
haven't got exactly what they want, and you know where 
they can get it, send them there." 

"To some other store?" the amazed saleswoman may ask. 
"Surely," the merchant who thoroughly understands mass 
production will answer. "To sell goods that the customer 
does not want, or to sell goods that cost more than they 
should cost to sell them just because they happen to be in 
stock is bad business. 


"If they are sold, they will be replaced by more of the 
same bad goods, but customers who have bought them will 
be shopping elsewhere and the new goods will be left on 
the shelves." 

This hard-headed, selfish merchant knows that even he 
may make mistakes, but if he does make mistakes, he doesn't 
want those mistakes incorporated into his business. Either 
he or the person who does his buying for him may buy 
something occasionally which the public does not want, or 
at a price which does not permit him to sell it at a profit 
without charging more than his customers will readily pay. 
If charming salespersons, however, dispose of these goods 
at the price asked, the mistake will not be detected; and the 
sooner any mistake is detected, the better it is for any busi- 

It was not through any social idealism, I assure my readers, 
that I came to advocate this principle of "Parent Service/' 
I advocate it as a business principle only because it works. 
It makes profits. It corrects mistakes. It eliminates falsehood 
and sham and misunderstanding and gets everybody pulling 
together to give the buying public the best service which 
can possibly be given. 

Does it not also have a genuine religious significance? 
What is the actual effect spiritually upon the employee who 
learns that business is not a matter of smart selling, but of 
supplying human wants, and that successful business con- 
sists of finding ways of supplying them more abundantly? 

In such a business organization, for one thing, fear is 
eliminated. Doubtless love does not take its place immedi- 
ately, but there is a development of sane cooperation. Em- 
ployees can not view such a management with suspicion 
at least, they do not continue to do so and the management 
no longer looks upon the employees either as old retainers 
to be pampered and coddled, so long as they remain sum- 


ciently servile, or as so many wild horses to be tamed and 
broken to follow orders unquestioningly. 

Here, then, is a complete new basis of human association, 
and to assume that such an age can have no worth while 
right, that is, in assuming that religion has to do, primarily, 
with human relations. At any rate, it has a profound human 
significance; and religious leaders who are at all interested 
in human life can not afford to overlook it. 

Merely to say that we have hit upon an age of skepticism, 
and to assume that such an age can have no worth while 
religious expression, is simply to confess religious bank- 
ruptcy. If we find out why people have become skeptical, 
however especially if we discover why an attitude of con- 
stant questioning is now necessary the discovery may il- 
luminate our religious thinking. 

Blind obedience to authority has heretofore been neces- 
sary, whether the authority in question was right or wrong. 
It was necessary because human society could not hold to- 
gether without it. Society could not progress, to be sure, 
if such obedience were carried too far; but neither could it 
progress if it could not hold together. Without this attitude 
of unquestioning obedience, even rebellions against consti- 
tuted authority could not succeed. Social stability in the past, 
therefore, was largely a matter of military discipline, and 
social progress largely a matter of military revolution; not, 
however, a revolution against authority, but revolution 
against some particular authority and the substitution of 
some other authority which, in turn, must be unquestion- 
ingly obeyed. 

In these revolutions, the established religious institutions 
almost unfailingly allied themselves with the established au- 
thorities, against the authorities which were trying to get 
themselves established. They looked upon each new upris- 
ing as iniquitous and irreligious; but when the new move- 


ments became established, the institutions of religion sup- 
ported them against all future uprisings. Many have indicted 
the institutions of religion for this, and have proved to their 
own satisfaction that their attitude was not logical. When 
we study the facts of history, however, and observe how 
vitally important to the world respect for constituted author- 
ity has always been, we may reach a different verdict. 

If there was ever to be a human society, it had to get 
itself started. It seems to have started with the institution 
of the family; and when the family was the only social insti- 
tution there was, children had to obey their parents, not 
because these parents were wise or right, but because they 
were their parents. Obedience was more important, seem- 
ingly, than justice or wisdom, for justice and wisdom could 
wait, whereas, if obedience to parents were not established, 
human society couldn't happen. 

It was the emergence of other social institutions which 
clipped the absolute power of parents; and these other insti- 
tutions emerged because people were no longer totally de- 
pendent for continued existence upon the institution of the 
family. These institutions could succeed, however, only as 
they developed not mere acquiescence, but a devoted fol- 
lowing. Lords, kings, states, even leaders of rebellion, de- 
manded unquestioning obedience on the part of their 
followers; not because they were right, but because, without 
such loyal acceptance of authority, there could be no social 

Human organization, then, naturally adopted the military 
pattern. Orders were to be obeyed, not because they were 
right, but because they were orders. Rulers who found their 
plans obstructed by equally powerful rulers might, to be 
sure, get together and try to avoid hostilities. But as far as 
the masses were concerned, there could be no compromise 
with orders. 


"Theirs not to reason why, theirs but to do and die!" 
This applied not only to men in military service, but to 
children in the home, to students in school and in Sunday 
school, to serfs on estates, and, in the early days, to em- 
ployees and subordinates even in business institutions, if 
they hoped to remain on the pay roll. The rise of democracy, 
to be sure, did much to undermine this old concept of au- 
thority, but it did not dispel it, and the officiousness of 
office-holders was limited often only by their ability to get 
their orders obeyed. In religious circles, Protestantism re- 
belled against the absolutism of the hierarchy, only of neces- 
sity to set up the absolutism of a sacred text. Voices were 
raised, from time to time, of course, against the recognition 
of any supreme authority even God but there seems to 
have been a social principle at work making it impossible 
for such ideas to dominate. If there was to be any social 
stability, in any period before the present, everybody could 
not think for himself, and without social stability, there 
could be no social progress. 

In a word, the only social organizations which had yet 
been achieved were class organizations. In theory, democracy 
might be an expression of mass thinking, but in practice it 
could not be, for the masses were economically dominated by 
the classes, and continued to be so dominated until the 
advent of mass production. Under democracy, to be sure, 
everybody might have a vote, but one had to obey the dicta- 
tions of capitalists or their representatives, if he hoped to 
get or hold a job. Votes were desirable, but jobs were neces- 
sary; and when the desirable opposes the necessary, it is 
always the desirable which gives way. 

The theory of socialism, to be sure, promised to do away 
with class organization. Under socialism, it was argued, the 
masses might seize and hold the industries of the world; 
and representatives of the masses, if they knew how to run 


those industries and were above temptation, would run them 
in the interests of the toiling masses. Mass production began 
with no such theories. It began with facts, only to discover 
very shortly that it could not be successful unless it not only 
served the masses faithfully but learned, through constant 
fact-finding, how to give better and better service day by 

Mass production did not discover how to distribute wealth 
equitably, either so that everybody should have exactly the 
same amount or that each person should be paid exactly ac- 
cording to his social worth. It did not solve the problem of 
whether a dentist is worth more than a plumber, or a gar- 
ment worker more than a garage mechanic. It did discover, 
however, that it must produce an increasing volume of 
wealth, and that it must distribute this wealth to the masses, 
since, in the very nature of the situation, no amount that 
could possibly be distributed to the classes would be enough 
to permit mass production to go on. It discovered, therefore, 
how to distribute buying power, so that the masses, hitherto 
condemned to poverty, would be able to have their wants 
supplied; and how to distribute leisure, with its opportuni- 
ties, never open to the masses before, not only to enjoy 
material abundance but to develop intellectual, social and 
spiritual culture. 

It goes without saying, of course, that all these things have 
not yet been brought to the masses, for the system of mass 
production has just begun. But the way has been discov- 
ered, and the business necessity for following that way has 
been discovered; and it is the way of human liberation. 

That is the great meaning of these wonderful times. Be- 
cause mass production, developed from fact-finding, is more 
successful than traditional production, it already dominates 
the market and therefore must supplant the old traditional 
methods by which human beings have been striving to keep 


alive. In doing this, however, without making any change in 
human nature, it revolutionizes all human relations, and 
compels those who would be great among us to become the 
servants of all. 

It has also discovered the way of service; and the way is 
no longer the way, merely, of devotion to an ideal nor of 
abject obedience either to a leader or to some sacred text. 
It is the way of fact-finding. It is the way of truth. Only as it 
finds the truth can human life be liberated, and only by eter- 
nal questioning can the truth be found. It is this which 
renders the military form of organization obsolete, whether 
in industry or in school or in Sunday school. We can no 
longer follow leaders blindly, and we can no longer pre- 
serve our social stability through the regimentation of our 
thoughts. It was the class system of society which made such 
tactics necessary the system by which each group could 
achieve its desired objectives only by shutting the masses out. 
Those were the days of poverty. These are the days of abun- 
dance. In these days, even business success depends upon 
our letting the masses in. 

What the religious institutions will do about this, I do 
not pretend to know. I know only that the religious institu- 
tions of the future will be those most thoroughly dedicated 
to spiritual fact-finding, and not to the preservation of any 
formula. No longer, at any rate, may we fear that churches 
will betray the masses by lining up, as they have historically 
done, with the dominant economic order. For the dominant 
economic order now is the order of mass production the 
system whose success depends upon the utmost possible ser- 
vice to all society, particularly to those who have hitherto 
been disinherited. 

The churches of the past, rallying round the creeds of 
the past, often depended for their material existence upon 
alliances with the economic masters of the past; and the 


masters of business based upon opinion could do nothing 
but advance opinions as to what the church should do. This 
frequently left the churches in a most embarrassing predica- 
ment; for it did not follow that a man whose opinions were 
good in matters with which he had had large experience was 
fit to express decisive opinions in other matters with which 
he had no more experience than others. But he did not know 
it, and those who sought his advice did not know it. So he 
shaped the policy of educational and social and even re- 
ligious institutions, without any qualifications for the job 

That error, we may be confident, is not likely to be re- 
peated, even if business leaders are still called into counsel 
in these non-commercial affairs. For the new leaders of busi- 
ness have gained their leadership, not through the excellence 
of their guesses, but because they have been trained to find 
and to follow the facts. 

If religion 15 service, then, if it is a matter of human re- 
lations, if it is the way of the more and more abundant life 
for all humanity, we are at the beginning of the greatest and 
most inclusive religious movement of human history. For 
our problems are no longer the problems of scarcity and of 
poverty problems which could be met only by shutting the 
alien masses out. They are problems, rather, of abundance, 
of surplus, of what we have been calling overproduction 
the discovery that our ability to serve has completely outrun 
our plans for service and that we must of necessity evolve 
new plans looking to a more abundant life for all. 

As to the religious expression of this emerging social 
order, we whose minds are necessarily steeped in the tra- 
ditions of a passing order will doubtless reach many and per- 
haps diverse conclusions. Of one thing, however, we may be 
sure: it will not be a part-time religion, or a religion which 
will necessitate any withdrawal from life. In the days of 


man's disunity, in the days when he was not only compelled 
to devote almost all his energies to the problem of food, shel- 
ter and clothing, but when it seemed that he must always be 
protecting himself against the maraudings of other human 
groups, about the only opportunity he had for religious ex- 
pression lay in his being able to withdraw to some inviolate 
sanctuary, or in his having one day out of seven in which to 
cease his labors and meditate as best he could upon holy 
things. But now that science is abolishing the cruel struggle 
for existence, now that the well-being of others has become a 
selfish necessity for each of us, now that we have discovered 
that we must wage cooperation with the same intensity with 
which we have customarily waged war, our religion will and 
must be a seven-day religion a religion not of escape from, 
but of constant, creative participation in human life. 


ONE of the most mischievous superstitions in connection 
with the coming of industrial civilization is the 
assumption that the greater and greater use of machinery 
tends to standardize or to mechanize human life. 

The notion is utterly contrary to the facts, but this does 
not keep certain highly intellectual persons, and even some 
eminent scholars, from entertaining it. They believe in 
"robots" today quite as childishly as they once believed in 
Santa Glaus, and quite as naively as the eminent intellectuals 
of the middle ages believed in witches and demons. Fortu- 
nately, they are not keeping us from inventing new machin- 
ery; they are simply keeping us from appreciating it, and 
from using it as effectively and as happily as we might be 
using it. 

These croakers remind me of a certain type of mother 
who, in her love for her children, has come to love their 
childishness, and is therefore dismayed at the discovery that 
they are growing up. The youngsters are learning new words, 
new phrases, are even beginning to read books and evince a 
taste for literature, all of which so encroaches on their baby 
talk that the doting parent is utterly distracted. Such a 
mother, to be sure, can not quite keep her children from 
becoming men and women, but she can and does create no 
end of mischief. She can keep them, sometimes, from want- 
ing to grow. She can keep them from appreciating the new 
developments and the new responsibilities of life. 

It is much the same with these intellectual kill-joys. 
They can not keep the machine civilization from ad- 
vancing, and they often wistfully admit that they can not: 



but they can and do sour the lives of those who take them 

Why curse the sunrise because it obscures the stars? True, 
the sunrise does obscure the stars; and the machine civiliza- 
tion compels us to see things which were out of sight before, 
and to observe many of the old familiar things in an entirely 
new light. But why be sour about it? Why be partisan at all? 
Why take issue between childhood and youth as to whether 
it is better to be six, or sixteen, or sixty years old? 

The only real issue is whether we favor life or stag- 
nation. The fun of being human consists of not stopping. 
Our very bodies consist of the cells which our bodies 
create and use and throw away, creating new cells to take 
their place; and human life is human because it is forever 
throwing off its yesterdays and making tomorrows. 

Now for the facts, instead of the fancies, regarding the 
standardization of human life through the general adoption 
of machine processes. In what ways, if any, are we now losing 
our individuality and being compelled to live just like 
everybody else? 

In the first place, must we all eat the same kind of food 
now, or do we have a larger variety of foods to choose from 
to satisfy our individual tastes? That question answers itself. 
Before the machine age, especially before the age of world- 
wide trade, practically everyone was limited in his diet to 
the foods which could be grown in his immediate vicinity 
and to the foods which were grown in his immediate vicinity. 
Now, we are not only picking and choosing daily from foods 
grown everywhere, but we are growing in our own neigh- 
borhoods vegetables and fruits which did not grow there in 
the good old days; and we are even inventing vegetables and 
fruits which never grew on earth before. Due to modern 
methods of mechanization, we can have fresh fish in the 
desert, ice cream in the tropics and bananas and cocoanuts 


in our northern winters. In fact, it is likely to be after a 
breakfast of newly invented grapefruit, Brazilian-grown 
coffee and his current choice of a dozen or more cereals, 
after a lunch in a French or Italian or German restaurant, 
as his whim may dictate, and after a dinner of Chinese chow 
mein with all its oriental fixings, that the American intel- 
lectual is likely to rise and state that there is no longer any 
variety in life. 

How about housing? Ignoring the question for the mo- 
ment as to whether the house of the average family is better 
or worse than it used to be, what about one's choice as to the 
kind of house that he shall live in? Formerly, there was 
almost no choice for the average person. True he might 
build the house himself; but when it was finished, it was 
almost an exact replica of the house which his neighbor had 
built for himself, for the average man had a very small in- 
come and, whatever kind of house he preferred, the one he 
built was the one he could afford to build, and the only kind 
he could afford to build was the very kind which his neigh- 
bor was also building. If he lived in one place, he had to 
build a mud hut; in another, he had to build a log cabin; 
in still another, a shanty out of boards. 

Such habitations may seem quaint to visitors from other 
realms; and they rather resent it when a population, suddenly 
blessed with greater buying power, considers its own wishes 
in the matter of more comfortable houses and refuses to 
devote itself to the business of appearing quaint to tourists. 
Like it or not, however, a higher buying power is invariably 
accompanied by attempts to get away from the old uncom- 
fortable restrictions. Its first manifestations may very well be 
manifestations of poor taste; for one has to have experience 
with any force before he is able to use it gracefully. But the 
tendency is obvious. The machine civilization, instead of 
standardizing us in the matter of housing, is rapidly liber- 


ating us to choose the kind of housing that we individually 
prefer. Once again, the man who has been parroting this 
groundless superstition that machinery is causing us all to 
live alike, may be pondering at the time whether to lease a 
city apartment or a house in the suburbs, or whether per- 
haps to build a beautiful little house according to his own 
sweet dreams, with an acre or two of lawn and flowers, 
so far out, to be sure, that he may have to commute to 
his work but, due to modern mechanization, thoroughly 
equipped with hot and cold water and electric cooking and 

Not only in food and shelter but in clothing have we 
entered upon days when people are more and more able to 
consult their individual tastes. It is true we follow styles, 
but we do not follow them for long, monotonous periods; 
and as better and more economical methods of producing 
and distributing wearing apparel are discovered, we find 
ourselves able to purchase a larger and more varied ward- 
robe. We may not have as many different robes as the ancient 
grandees had, but there were few grandees at most, in the 
old days, and the wardrobes of the masses were extremely 
limited both as to comfort and appearance. Today, due to 
machine production, millions can have all the clothes they 
care for, and, due to mass production, it is only a question of 
a few years when the masses will find themselves in equal 
luck. Fine raiment, then, will doubtless lose some of its 
ancient distinction. It will no longer be accepted as evidence 
that the wearer is a nobleman, and there will not be the 
motive which has functioned through the ages to induce us 
to try to dress like some one we are not. We will try, rather, 
to dress like ourselves, and to cultivate our individual tastes. 
In clothing, as in food and shelter, the standardization of 
production and distribution is liberating mankind from 
forces which once operated to standardize human life. 


It is sometimes said that our American cities are becoming 
standardized because, wherever we go, we see the same signs, 
and the same familiar fronts of Woolworth, Grant or Pen- 
ney, of A. and P. groceries, of United Cigars or Thorn McAn 
shoes. But these chain stores are selling more things, and 
more varieties of things, to the modern masses than the 
masses were ever able to buy in any other period of human 
history. The chain store is the advance guard of mass dis- 
tribution, and mass distribution is the liberation of the 
masses from the ancient sameness which limited buying 
power imposed upon them. 

It might be well, incidentally, to linger upon that phrase 
"wherever we go." That is a complete give-away to the 
croaker about the standardization of life. For the masses are 
going today, as never before. They are going to more places, 
and they are going, largely, for the sheer fun of it. Less than 
half a century ago, travel of any kind was a novelty. Even a 
buggy ride was a treat, and a railroad journey of a few hun- 
dred miles was a great event in the average person's life. But 
mass production brought the automobile to the masses. It 
has widened everybody's horizon, physically and socially. It 
has brought the culture of the city to the knowledge of the 
countryman and made the city dweller acquainted with the 
great wide open spaces; and it has simultaneously so in- 
creased the average man's buying power that, instead of hav- 
ing to deprive himself of other luxuries in order to enjoy a 
motor car, he has been able to enjoy hundreds of things 
which he could never have bought in a horse and wagon 

Above all, mass production has given man time in which 
to live. He now works, perhaps, eight hours a day, and five 
days a week. Whether his workday will become even shorter 
must soon depend entirely upon whether he wants it to be. 
For mass production has just begun; and if the present stand- 


ards of living were high enough to suit the masses, mass pro- 
duction methods would soon make it possible to produce 
and distribute what we are now producing and distributing 
in a fraction of the time which we are now devoting to the 
task. It seems more likely, however, that man will want more 
and better things, even if he has to work five days a week to 
get them. I think the masses will want incalculably better 
houses than they are living in today. I think they will want 
safe and comfortable aeroplanes. I think they will want tele- 
vision, so that they can see and converse intimately with any- 
one in any part of the world. I think they will want diseases 
eliminated generally as thoroughly as we have eliminated a 
few. I think they will want the danger and the pain removed 
from childbirth. I think they will want expert education for 
every child, based not upon memorizing a conventional set 
of formulas, but upon the scientific study of every child by 
qualified experts, to discover his peculiar capacities and to 
direct him into the fullest expression of whatever talents he 
may have. 

If man wants these and a thousand other things, he can 
have them. I do not mean, of course, that any man can have 
them. It all depends upon how the buying power is dis- 
tributed; and unless some of these things are made available 
to the masses, no one individually could possibly become 
rich enough to buy them all world-wide television, for 
instance, or a world free from disease. In the very nature of 
such things, they must be made available to everybody if 
they are to become available to anybody. The masses, if 
they want them, can have all of these things and more, but 
only, of course, through mass production through making 
and distributing the things which go to make up our present 
standard of living, in the most efficient and waste eliminat- 
ing way, and applying the man-power so released to the 
supplying of other wants which are not yet being supplied. 


Incidentally, of course, we shall have to distribute buying 
power, so that the masses may be able to buy what the masses 
are engaged in making. But such a distribution of buying 
power (through low prices and high wages) is an essential 
principle of mass production. If that principle were univer- 
sally followed (as it soon must be, for mass production is 
already so successful that it is crowding out other forms of 
production) it is obvious that the industrial machine will 
not slow down until it has produced not merely food, shelter 
and clothing for all, but the kind of world in which the 
masses want to live. 

And since we are not all alike to start with, this will neces- 
sarily be a world in which we can be different. We are alike, 
however, in certain respects. We unanimously want food, 
shelter and clothing, and we are even willing to sacrifice our 
individuality, if necessary, to get them. Throughout all his- 
tory, in fact, this is exactly what the masses have been doing. 
They had to live, and in order to live at all, they had to 
devote about all their time and energy to the problem of 
staying alive. They worked individually, and they pro- 
duced so little at best by these individual methods, that each 
had to copy the conventional way of doing almost every- 
thing, rather than risk new ways which might result in 
failure and starvation. Each had to work ceaselessly, more- 
over, from dawn to dark throughout his whole life, doing 
things, for the most part, in the way they had always been 
done in order to live, it seemed, as people had always lived. 

Mass production the massing of the world's knowledge 
for the service of the masses must change all that. First, it 
must solve the elemental problem of food, shelter and cloth- 
ing, so that the job of staying alive, while quite as important 
as ever, need be no more burdensome than is the task of 
getting our drinking water now. After that, it must simplify 
the task of securing for all, with the least possible tax upon 


everybody's time and energy, those physical comforts and 
luxuries which almost everybody has learned to want, and 
which, if not secured, are likely still to keep man struggling 
merely for the acquisition of things. 

Then, and only then, can man be truly free. He may con- 
ceivably be free to loaf; only, having found his freedom 
through cooperative effort, it seems certain that he will still 
employ this cooperative effort to make his world more liv- 
able in a thousand ways. In any case, the determining factor 
will be human need; for mass production, by its very nature, 
must confine itself to the production and distribution of 
things that people want, whether those things happen to be 
ships and shoes and sealing wax, or health and long life and 
a better education. 

It is our failure to cooperate which reduces life to a dead 
level our failure adequately to use the principles of mass 
production, by which alone the machine may become the 
efficient servant of us all. In our traditional thinking, we 
have tried to make goods without distributing the buying 
power by which alone they may be sold; and then we have 
tried to manufacture jobs to overcome the disadvantages 
which we have created jobs for high-pressure salesmen, for 
instance, to compel people to buy what they do not want 
or to pay unnecessarily high prices for what they do. We 
have built up organization after organization, scheme after 
scheme, racket after racket, each for the purpose of selling 
things rendered unavailable for sale by the very high prices 
which such a system of distribution necessitates. We have 
even been talking lately about the "rights" of independent 
storekeepers who find themselves being undersold by chains, 
as though it could be anybody's right to render the process 
of distribution more costly than it needs to be; and we have 
sighed for the days when everybody, as we imagine, was free 
to go ahead and do whatever he felt like doing, regardless 


of how it might fit in with what anybody else was doing. 

Actually, of course, there never were such days. Until 
human beings learned some sort of cooperation and some 
sort of group loyalty, they simply were not human beings. 
The essential difference between this mass production age 
and other ages is that mass production, in its very nature, 
must include everybody in its group; and must aim, there- 
fore, to liberate everybody, not, of course, from the laws gov- 
erning human nature, but for the larger and larger human 
life which organization for this larger loyalty makes possible. 

Mass production liberates life from its traditional for- 
mulas. It liberates life from the supine acceptance of mere 
authority and initiates it into the courageous search for facts. 
It liberates life from local prejudices and from narrow 
nationalism, as well as from class prejudices and class tra- 
ditions, and therefore liberates it from the necessity of social 
and international war. It liberates human life, moreover, 
from soul-deadening toil and the still more soul-deadening 
poverty which so fastens everybody's thought upon mere eco- 
nomic security that life itself becomes one humdrum 

Mass production undoubtedly means mechanization; but 
it means the mastery of mechanization by human life, instead 
of the mastery of human life by traditions which keep us 
from using the machines which we have built. 


WHEN a shopkeeper writes about beauty, he is tread- 
ing on dangerous ground. There is a widespread 
assumption, at any. rate, and the assumption is fostered by 
many genuine artists, that art and ' 'commercialism" are 
deadly enemies, or at least not on speaking terms. The idea 
seems to be that art is art and trade is trade and never the 
twain shall meet. 

Humbly, therefore, I admit that I do not know what 
beauty is. Nevertheless, I think it has to do with human life; 
and a shopkeeper nowadays must be interested in anything 
which has to do with that. 

I am inclined to agree with my artist friends, in fact, that 
the pursuit of beauty is the greatest thing in human life. 
Perhaps we shall never find ultimate beauty; perhaps we 
shall ever be on the trail, but that in nowise invalidates the 
search. We shall never learn the full truth, either, about any- 
thing; but the search for truth is intellectual development, 
and the search for beauty is the development of but here 
I pause, for the word I want to use doesn't seem to have been 
invented yet. I do not mean mere aesthetic development; at 
least, not what the term aesthetic development means to me. 
I doubtless mean spiritual development, but possibly not 
what that term may mean to readers. I mean the develop- 
ment, not merely of comprehension but of appreciation of 
truth. It includes the development of imagination, but of 
imagination working with reality instead of opposing it an 
imagination which can see the truth in things false, which 
can see nobility in things sordid, which can see beyond what 
is being done to what is being attempted, and even beyond 



that to what might have been attempted except for limita- 
tions which the imagination may surmount. 

But these are mere words. Some may give me credit for 
meaning to say something; but I am a shopkeeper, not an 
artist, and I am constantly constrained not to talk about such 
things not even to let it be known that a shopkeeper may 
upon occasion dream about them. 

My reason for bringing up the subject at all is a remark 
which I hear from time to time to the effect that this ma- 
chine civilization is making an ugly world a world, pre- 
sumably, in which the quest of beauty is being abandoned. 

Whenever I have asked for a bill of particulars, I have 
failed to get it. The charge, I take it, is supposed to be in- 
spired; and if one is skeptical about it, it must be because 
he is a shopkeeper and hasn't an artistic soul. My reverence 
for beauty, however, does not lead me to assume that artists 
can not make mistakes; and when they make a remark like 
this, I wonder if it is not their orthodoxy, instead of their 
art, which is really speaking. In other words, their traditional 

The history of art, surely, is not a subject too sacred to in- 
vestigate. And at no time, as far as I have ever been able to 
find out, did artists ever assume to manufacture beauty in 
the abstract. They engaged instead in making things in 
which, as they hoped, beauty might be expressed. 

Pictures are things. Statues are things. Cathedrals are 
things. Moreover, they are things which people wanted, or 
the artists would not have engaged in making them; and the 
manufacture and distribution of things that people want is 
certainly within the purview of a study of mass production. 

I grant that they did not make these pictures and statues 
and cathedrals in factories. I am told, however, that they 
made them individually, "right out of their own heads," and 
I most emphatically deny that. No one ever made a cathe- 


dral alone. No one ever made a statue alone. No one ever 
made even a picture alone. A Navajo Indian, drawing a mar- 
vellous pattern in the sand, without the use of a single tool, 
is not a complete exception. For the knowledge that this can 
be done was taught to him. It was his tribe, not he alone, 
which developed the technique. Even the pattern which he 
draws is a Navajo pattern. Every line runs rigidly thus and so 
according to the best Navajo standards. It is art, undoubt- 
edly, not commercialism; for a mind preoccupied with sell- 
ing pictures would not draw them in the sand for the winds 
to blow away. But the picture means something. It is picture 
writing, and picture writing was developed in answer to the 
human need for symbols by which ideas might be commu- 

Man's search for beauty has historically kept pace with 
his search for the things which man had to have. Man had to 
have something in which to carry water, and he eventually 
discovered how to fashion such a thing in clay. From that 
gross, utilitarian beginning, he developed the art of pottery. 

Man could not cut stone until he found something to cut 
it with; then sculptors took these tools and made goddesses. 
They did not, it appears, invent these goddesses either; they 
made goddesses which had already been invented to supply 
the need of human beings to account for things and to ex- 
press the way they felt about them. 

Man also had to have houses, and he had to invent tools 
and building technique. Then he proceeded to build ador- 
able houses for the gods whom he adored. Art, to be art, had 
to keep pace with life. It had to find its harmonies. It devel- 
oped in all countries where a sufficient number of human 
beings lived, and where the struggle for mere existence was 
not so intense as to consume about all the human energy 
which could be applied to it. 

Not only was artistic technique conditioned by what 


people wanted, but man's notion of beauty seemed to be 
similarly conditioned. In countries where food was peren- 
nially scarce, and the masses were likely to be very thin, the 
statues which represented beauty to them were likely to be 
very fat. Fatness, also, was a sign of wealth and social posi- 
tion, and every young woman who could get fat did so. In 
countries more developed economically, fatness lost its mean- 
ing. It didn't prove anything, or else it suggested that the fat 
one was abnormally engrossed with eating. Thinness then 
became beautiful. In America, the most opulent civilization 
of human history, thousands of women have actually under- 
mined their health through semi-starvation, in their efforts 
to prove that they are beautiful according to the particular 
notion of beauty which happened to be current at the time. 
A generation or two before, women similarly tried to look 
like wasps, instead of like human beings, and did violence to 
their internal organs by tightly lacing their waists. 

Did such practices express beauty? Few will now say that 
they did but why? There is only one answer that suggests 
itself to me; it is that, by and large, these practices did not 
work. A woman, to be sure, might get the husband she de- 
sired through such a ruse. But she could not get the health 
she desired, nor the freedom she desired, nor the efficiency 
in motherhood which she desired. Without pretending to 
say what beauty is, I venture to suggest that the line of 
beauty must in the long run harmonize with the line which, 
by all-round human experience, proves to pay best. Art and 
trade do meet. Beauty and the new scientific commercialism 
are not enemies but different aspects of the same human pic- 
ture. The time has now come, in fact, when tradesmen 
should be artists, and when artists should be discovering the 
harmonies in this new world of trade. 

That which serves its purpose well becomes beautiful to 
us, if its purpose is in harmony with our purpose. We say 


that there is no accounting for tastes, but there is. The Greek 
arch was beautiful, and it was accepted for ages as beautiful, 
because it was able to sustain the weight it was required to 
sustain. If it had not done the work it was designed to do, 
we can depend upon it that the world would never have 
called it beautiful. But the Greek arch was a way of building 
in stone. Its proportions depended upon the character of 
stone and had to be in harmony with that character. Archi- 
tects, unfortunately, did not always remember this, and 
when they were first asked to design buildings to be built of 
steel, they tried to duplicate the lines which experience in 
masonry had discovered to be beautiful. 

The buildings which resulted were eyesores, but people 
did not seem to know it at the time. The trouble with them, 
from the business point of view, was that they cost too much. 
That was the trouble with them from the architectural point 
of view also, but the architects did not know that at the time. 
Steel was conceded to be an economical way of building high 
buildings, while building steel buildings to look as though 
they were built of stone was not so economical. Fortunately 
for architecture, economy eventually won out, not against 
beauty but against this fixed tradition of beauty, and build- 
ings began to be built according to simple engineering calcu- 
lations. These buildings at first were not beautiful, perhaps, 
any more than the first clay cups with which man carried 
water were beautiful, but they constituted something to start 
with in the great new art of building in steel. Few will now 
deny that the modern skyscrapers of Manhattan have a 
beauty all their own; for when architects, instead of remain- 
ing slaves to ancient forms, eventually began to look for the 
harmonies of the steel age, architecture once more became 
a living art. 

I am not contending that the radiator is necessarily more 
beautiful than the fireplace. It would be strange if it were, 


considering that the fireplace represents centuries of devel- 
opment while steam and hot-water systems are new discov- 
eries. But making radiators look like fireplaces will not be 
the answer. The task for the artist, it seems to me, is to dis- 
cover the harmonies in a world which is rapidly being 
liberated from slavery to climate, instead of mooning about 
the aesthetic superiority of heating systems which no longer 
satisfy the human desire for heat. 

Some of the first automobiles carried whipstocks, not that 
anyone supposed that the driver would ever need a whip, 
but because a wagon without a place for a whip did not look 
quite right to the designers. Automobiles never became 
beautiful until designers got away from such traditional 
thinking and tried to make their machines look like motor- 
driven, instead of like horse-drawn vehicles. 

To assume that there is no place for the artist in this mass 
production civilization is to assume that art is a body of 
formulas and not a living force. As for art and commercial- 
ism being enemies, they always have cooperated and they 
always must cooperate, wherever human ingenuity is being 
employed to supply human wants. Handicraft and the par- 
ticular forms which it developed may be passing, but human- 
craft has taken its place. The artist can not escape from life 
and, if art is a living force, he will not try to. Mass pro- 
duction, in its very nature, must serve the masses in the 
most efficient and the most abundant, and therefore in the 
simplest, way in which the masses can be served. That is the 
way of lowest cost in production and distribution, and of 
lowest prices to consumers. That method does not allow for 
useless ornamentation, for the cluttering up of things with 
forms which no longer have a meaning. Things that serve 
their purpose more simply can reach a wider market, and 
can therefore be manufactured and distributed more profit- 
ably. But that is the "thing of beauty" the pursuit of which 


is the most interesting and worth while in human experience. 
This pursuit, moreover, need no longer be confined to the 
little coterie of artists who, in the past, have had to carry the 
banner of beauty, while the masses were condemned to soul- 
deadening poverty and toil. The flicker of genius in every- 
body's life has some chance for expression now. For mass 
production will make mere living a simple task, and to satisfy 
life's larger wants must then become the common goal. 

I do not pretend to know what all these larger wants shall 
prove to be. We may be certain, however, that when the 
masses are freed from the struggle for existence, they will 
furnish an environment in which true art can thrive. I can 
not, then, look back to any "Golden Age" of art. To me the 
Golden Age lies just ahead. I do not mean that artists must 
engage in mass production, or that they must limit their 
work to some dead level of mediocrity in the futile hope of 
appealing to everybody's taste. As always, I assume, many 
will strive for popularity, while others will venture into new 
fields and their work will be appreciated by relatively few 
contemporaries, such artists appealing rather to the verdict 
of posterity. But artists will not be hampered, as historically 
they have been hampered, by the necessity of submitting 
their work to the narrow and almost necessarily biassed judg- 
ment of some economically dominant class. The liberation 
of the masses, it must be remembered, is the inevitable goal 
of mass production, and it must not be confused with any 
merely benevolent endeavor to see that the toiling classes are 
well fed, well clothed and well kept. Taming the masses is 
not and can not be any part of the mass production program. 
The masses must be freed, rather, to venture into realms of 
human living from which they have necessarily been de- 
barred before. In this emancipation of the very soul of man, 
it seems to me that one must sense the beginning of a new 
and finer, although as yet incomprehensible Art. 



PHILOSOPHERS, moralists and builders of Utopias are 
likely to curse the profit motive as the source of all our 
social ills. Even business men are likely to suppose that we 
may find some better motive, such as "service" or "welfare" 
or "cooperation." I find it difficult to concur. I am in favor, 
surely, of service and welfare and cooperation: but I can 
not help thinking of how little we would have of service 
and welfare and cooperation if they did not pay. 

In the pursuit of profits, I must admit, business has often 
committed every known crime. It has outraged justice. It has 
been unspeakably cruel. It has ravaged and robbed whole 
communities. It has corrupted governments, it has fomented 
wars, and it has reduced men, women and children to bitter 
slavery. But we get nowhere, it seems to me, by blaming 
motives, or by attempting to substitute other motives for the 
motives which actually move us. The sex motive has simi- 
larly brought us to all sorts of human grief; but if the prob- 
lem can be solved only by the elimination of sex from 
human life, and the substitution of some entirely different 
motive, our plight, it would seem to me, is utterly hopeless. 

Undoubtedly we need a new expression of the profit 
motive. We already have that in mass production, which has 
discovered that the greatest total profits can be found 
through giving the greatest possible service to the greatest 
possible number of people. If mass production did not pay, 
however, we would not have it. Mass production developed 
from the use of machinery; and if machines had not been 
profitable, we would never have developed them. 

There is something, at least, which can be said for the 



profit motive, in contrast with such motives as public spirit, 
patriotism and social idealism. The profit motive, whatever 
may be said against it, has proved dependable, steady, always 
on the job. It doesn't have to be nursed and coddled by 
propaganda. It isn't necessary to resort to music and pag- 
eantry to bring it into play; and those who once devote 
themselves to making profits do not have to be urged con- 
stantly to keep the goal in sight. They may, to be sure, do 
many things that are unprofitable; and they may, at times, 
yield to impulses of generosity and of unselfish service; but 
we may depend upon it that they will not be constantly beset 
by temptations to enter into this and that strange venture 
because it offers them an opportunity to lose money. 

Such a dependable motive power as this is surely worth 
considering. If it can be attached to a machine well designed 
to serve the common welfare, the common welfare would 
seem to be assured, whereas if the common welfare is de- 
pendent upon keeping idealism at white heat, there is no 
such assurance. 

Under mass production, however, the profit motive not 
only can be attached to the common welfare, but it can not 
escape being so attached. Under mass production, attaching 
it to any other aim spells loss. There can be no profit in mass 
production unless the masses are also profiting thereby. 
There is no necessity, then, for any new motive in human 
life. The substitution of any new motive, in fact, if such a 
thing were possible, would be of very doubtful value. It 
would be like the substitution of a new set of laws governing 
electricity. We can depend upon our electric appliances 
working now, because they are built in accordance with un- 
changeable law. If the law governing electricity were subject 
to change, electric appliances based upon the current law 
might suddenly cease to be of any use whatever. 

Undoubtedly the profit motive as it has operated through- 


out human history has been responsible for no end of human 
misery. It has caused the strong to exploit the weak, and 
caused the few to live in ease and luxury at the expense of 
the suffering and almost starving masses. If there had been 
no profit motive in human nature, it seems quite probable 
that there would have been no wars, no human slavery, no 
privileged classes to exploit the masses, no tyranny of man 
over man. Those who think, however, that the world would 
therefore be one big happy family should think again; for 
without the profit motive, there would never have been such 
a thing as a human family, and the ideal of world brother- 
hood could never have been conceived. It required the actual 
experience of brotherhood to give birth to the idea of world 
brotherhood; and it was the actual institution of the family 
which gave us that experience. The family, however, became 
our institution because it was profitable, because human 
beings were desperately determined to live, because they 
could not live unless they had a steady income and because 
the family gave promise of such an income. 

Some families succeeded better than others, and this 
aroused envy and covetousness. Envy and covetousness, un- 
doubtedly, are sins; but sin undoubtedly is just plain error; 
and until people achieve understanding, they are fairly cer- 
tain to remain in error. It would be well for us to remember, 
also, that while this greater success of some aroused a desire 
to sin in others, it also did something else. It set an actual 
standard of success which did not exist before. It gave the 
unsuccessful a mark to shoot at. It demonstrated to the 
masses that a higher standard of living than the masses had 
ever had was at least humanly possible. Without such a 
demonstration and the human ambition which was gener- 
ated by it, it is hard to see how the standard of living of the 
masses would ever have been perceptibly raised. 

Human beings, strangely, seem to be the only beings ex- 


tant who have raised their standard of living generally. In 
these days, when the ambition to "keep up with the Joneses" 
excites our ridicule, and when we see so many people strug- 
gling to get expensive things, not because they want them 
but because their neighbors have them, there is danger of 
our losing sight of one very real and worth while truth. If 
people buy things which they can't enjoy because the Joneses 
have them, they also buy things which they do enjoy because 
the Joneses have demonstrated them. They may hire a uni- 
formed flunkey because the Joneses have one, but they may 
likewise have some child cured of infantile paralysis because 
the Joneses' child was cured. Modern surgery, modern den- 
tistry, modern sanitation, to say nothing of modern machine 
industry, would have been impossible if some people had 
not become rich enough, by fair means or foul, to live in 
such luxury as to make others discontented with their lot. 

We might have had peace on earth without the profit 
motive, but we could never have had peace and prosperity 
too. We might conceivably have had communism, but we 
could not have had mass progress. We might even have 
learned to love our neighbors as ourselves; but if our self- 
love is not dynamic, the altruism which equals it could 
hardly be dynamic. 

There is not much point in speculating, however, upon 
what human nature might have been. If we are to get any- 
where with it, we must take it as it is; and human nature 
always has operated on the profit motive, often even at the 
expense of human ideals. We have usually wanted peace, 
when we stopped to think about it, but we have wanted 
profits consistently, whether we stopped to think or not. We 
have been capable at times of great sacrifices, which shows 
that we have wanted something, after all, besides our own 
personal aggrandizement, but there always seemed to be a 
war between our selfishness and our unselfishness; and since 


our selfishness was constant and our unselfishness sporadic, it 
seemed that selfishness was always winning out. 

The time has come, however, when the greatest total 
profits can be secured only through supplying the masses 
with the best values. So there is no war now between selfish- 
ness and unselfishness; the only war is between the tra- 
ditional notion of where self-interest lies and the newly dis- 
covered truths of profit-making. 

The time has come, therefore, when we can have not only 
peace on earth, but a dynamic peace. Not a peace based upon 
things as they are, but a peace in which all intelligently 
selfish human beings shall be selfishly concerned in bettering 
the condition of all humanity. 

There is a limit, doubtless, to the number of material 
things that human beings care to accumulate. That limit, in 
fact, seems actually to have been reached by many modern 
men of wealth; and their tendency is not to go on accumu- 
lating, but to adopt a simple standard of living which gives 
them more personal freedom and more opportunities to 
enjoy and to appreciate life. Such men have no desire to 
"keep up with the Joneses," and no particular desire, on the 
other hand, to keep the Joneses from adopting any standard 
of living which appeals to them. As mass production brings 
economic security and a high standard of living to the 
masses, we may expect eventually that there will be some 
such general liberation from "the tyranny of things." 

When people everywhere can have all the good clothes 
that they want, it is not to be expected that they shall care 
to spend a large part of their precious time in changing their 
clothes, as grandees so often did in the days when fine rai- 
ment was a sign of aristocracy. Likewise, when they can have 
as good houses as they want, they may discover that they do 
not want perfectly meaningless mansions and palaces; and 
when they are all privileged to travel extensively, they may 


not wish to travel all the time. Even with mass production, 
of course, such a time is still far distant; and for decades to 
come, there should be work enough for everybody, under 
the most scientific management, to provide things for the 
masses which the masses eagerly want but which only a small 
percentage of the masses as yet enjoy. 

Conceivably, however, the masses under mass production 
may turn from a mere surfeit of things to seek a simpler 
life, and when that time comes, it may seem that the profit 
motive is no longer operating in human affairs. But we do 
not have to worry about that. It will not mean a change in 
human nature. It will mean its liberation, rather, to go on to 
other achievements. It will mean a change only in the kind 
of profits human nature wants. 


HUMAN life changes from day to day and from gen 
eration to generation; and human life must go on 
changing unless there is some fundamental change in the 
nature of human nature. 

If human nature should change, human life might go on 
indefinitely, without making any noticeable changes; but so 
long as it is the nature of human nature to aspire to a 
larger and ever larger life, human beings must constantly be 
different from anything which human beings ever were 

There have been many attempts in the past to change 
human beings through effecting some change in human 
nature, but these attempts have uniformly failed. It is as 
though we had tried to make electricity more useful than it 
was through altering the nature of electricity. Only when we 
got down to observing the actual facts of electricity were 
we ever able to make it useful. Pleading with the lightning 
not to strike our dwelling once seemed perfectly logical, and 
doubtless such prayers did have some effect upon the lives 
and future actions of the persons who prayed. But they had 
no effect, so far as we have ever been able to find out, upon 
the lightning. Only when we discovered something of the 
nature of lightning, and devised lightning rods, did lightning 
seem to be much impressed by our wishes in the matter. 

It may have seemed at the time that the person who 
prayed to the god of lightning not to strike him was reverent, 
while the person who undertook to direct the lightning was 
irreverent; but we can see now that they were equally rev- 
erent, only that one reverenced the current traditions while 



the other reverenced the facts. Each was governed by the 
same human nature, but they were very different types of 

In such a situation, it would be almost futile to argue as 
to which constituted the more desirable type the man who 
sought to control natural forces by traditional methods or 
the one who sought to control them by science. For their 
motives were the same, and human nature, being what it was 
and wanting what it wanted, would inevitably tend to take 
the direction which, by actual demonstration, brought the 
better results. I have never been able to discover any "war" 
between religion and science, or even between superstition 
and science. All that I have been able to observe is a war 
between people a war based upon their difference of 
opinion as to the best method of getting what they wanted 
to get and becoming what they wanted to become. In this 
war, however, the real scientist has seemed to take no part 
whatever. He has simply gone ahead with his work, trying 
to find out how things happen to happen, and then trying 
to make them happen; and when he made things happen 
that people wanted to have happen, and his critics were 
unable to counter with equally convincing achievements, 
human life edged over toward the scientific technique. 

Because human nature is what it is, there is always the 
necessity for personal adjustment. For human nature, we 
have discovered, is social in character, and can not submit to 
the unfettered control of individual animal instincts. It de- 
mands a larger expression. It demands a social expression 
in language, in law, in organized enterprise, in the constant 
creation of a social environment in which a larger life may 
be achieved. Because we are human, we can not be indiffer- 
ent toward the conduct of others; we must adjust ourselves 
to our human environment or adjust our human environ- 
ment to ourselves. 


Our first thought, naturally, is to adjust the whole human 
environment to our own personal whims. But most of us 
get over that in time; the others are taken to asylums. Even 
in our intolerance, we find it impossible to be entirely indi- 
vidualistic. We must gather other intolerant folks about us, 
people with similar prejudices and similar notions of what 
may or may not be tolerated. Then, if we have power 
enough, we may enforce our standards of conduct upon the 
community in which we live. 

Even in doing this, however, we must usually compromise. 
We must adjust our objectives, in some measure, to the com- 
mon objectives. We may not tolerate democracy. We may be 
openly defiant of the rule of the people; nevertheless, to 
be successful tyrants, we must cater to the wishes of the popu- 
lace in many ways. We can not impose rules upon them 
which they will not follow; we can not control a community 
while imposing conditions which force it to break from 
our control. 

Not many of us care, of course, to be absolute tyrants 
that is, after we have grown up. In early childhood, seem- 
ingly, we have no other ambition. Young babies do not care 
for anyone else's welfare but their own; but human educa- 
tion changes this, not because it changes human nature, but 
because it gradually forces the child to take others into con- 
sideration in every program of self-expression. 

This process of taking others into consideration, however, 
is a process which can not well stop anywhere. After a child 
has learned how to be a two-year-old, no matter how beauti- 
fully and satisfactorily he has learned his lesson, he has to 
learn how to quit being a two-year-old and how to become 
something else. Until he "grows up," he comes to perceive, 
he will have to keep adjusting himself to his environment. 
After he grows up, he sometimes fancies, he can go his own 
way, but he can't. 


The sooner any child learns this, the better; but learning 
even that is not enough. Bees and ants, it seems, are thor- 
oughly equipped to live in bee and ant society. But those 
societies apparently do not change, while human society 
changes constantly. If it were not for this, the problem of 
personal adjustment might be fairly simple. 

John Tanner, in Shaw's "Man and Superman," remarks: 
"The reasonable man is forever trying to adjust himself to 
society. The unreasonable man is always trying to adjust 
society to himself. Therefore, all progress depends upon the 
unreasonable man." Whether we are willing to subscribe to 
this observation or not, it is certain that personal adjustment 
to society as it is does not solve our human problem. It is 
quite as necessary to adjust ourselves to society as it is becom- 
ing and as human life really wants it to become. 

This, surely, is no easy task. It is a task which requires for 
its fulfillment all that we can possibly learn about human 
life. It requires not merely good intentions and indomitable 
determination, but it requires the application of science in 
place of mere established opinion along many lines. It re- 
quires the use of psychology and sociology, particularly, 
although in the very nature of human society, not many of us 
can become psychologists and sociologists. Even in the matter 
of personal adjustment, the purely personal approach will 
never do. 

There is a vast difference, in the first place, between what 
we want and what we think we want. A child may want sleep 
and want it so poignantly that it keeps itself and everybody 
else awake, for nervous excitement in the meantime may 
have induced it to think it wants the moon. The problem, 
however, is not how to get the moon for the child, nor even 
how to curb the child's ambition so that it will not want 
things. The problem is one of finding out exactly how the 
child's real wants may be supplied. It is a difficult and com- 


plicated problem at best; but it may be solved without either 
suppressing the child or seriously disturbing the moon. 

Heretofore, the problem of personal adjustment has been 
tackled by the individual from the standpoint of what the 
individual thinks he wants, and the individual has been sup- 
pressed by the community according to the standard which 
the community thinks is best. But the community's opinion 
is no more infallible than the individual's opinion. A stand- 
ard, in fact, to which a large community can subscribe is 
likely to be a mediocre standard, and to turn out mediocre 
individuals has often seemed to be the social aim. Man- 
kind, therefore, has gained the reputation of imprison- 
ing its liberators and crucifying its saviours, and many phi- 
losophers have cynically observed that they do it because it 
is the law of human nature that they should. 

But this is not the law of human nature. It is simply the 
way in which human nature acts in a world governed by 
opinion. Human nature wants what it wants, not what it 
thinks it wants; and as it tends to get what it wants through 
science, and fails to get what it wants through government 
by opinion, it does discard the rule of opinion and inaugu- 
rate the rule of fact. 

This has always been true, but the special importance 
historically of the present era lies in the greater community 
to which government by fact is now necessarily being 
applied. The family became the accepted way of life, not 
because the majority before the family era was convinced 
that its current way of life was wrong, but because the 
family brought results. It worked. It worked so well in the 
matter of supplying human wants that people discarded their 
old ways and began to live in families. 

The same is true of the machine system. Machine produc- 
tion supplanted family production, because people wanted 
things and machine production could produce more things. 


If people should ever discover that they don't want things, 
and that they were in error in supposing that they ever did, 
not only machine production but all kinds of production 
will stop. But that just isn't anything to worry about; for 
since people can not live without things, we may be sure 
that people do want things, and that they will try to adjust 
their lives to that system of production which supplies things 
most abundantly. 

It is in their system of production and distribution, how- 
ever, that their real relation to others is discovered, and the 
environment to which they must adjust themselves is deter- 
mined. It was in the family that brothers discovered that 
they were brothers, and most of the values which have given 
meaning to human life were found. In mass production, 
now, because it is the most successful system of production 
yet devised, we are discovering how everybody is related to 
everybody, and we will surely discover great new meanings 
to life. But this means that we must learn to adjust ourselves, 
not merely to a method of production, but to a process 
which, because it is based upon fact-finding, must constantly 
change as new facts are discovered, and which, therefore, 
must constantly create new social environments to which we 
must always be adjusting ourselves. 

There is surely no rest for the weary in such a prospect. 
Not only business men but all of us who have been looking 
for society to "settle down" are doomed to disillusionment. 
No imaginable standard of conduct, and no imaginable pat- 
tern of life, will be adequate for a social order which will 
not stand still. As a matter of fact, of course, social orders 
never have stood still. Even the family changed its constitu- 
tion from age to age. But things moved slowly enough in the 
old days so that each succeeding generation could imagine 
that they did not move at all; or that there was some pattern, 
at least, which might be considered perfect and beyond 


which it would never be necessary to advance. The result 
was that those who were sufficiently comfortable tried to 
keep everything just about where it was, while those who 
were uncomfortable imagined a Utopia and tried to push 
society into that. Neither party ever succeeded, but not until 
the age of science was it ever apparent just why neither could 

In the meantime, our educational effort was largely de- 
voted either to adjusting the individual to society as it was, 
or to making him good according to some fixed standard of 
goodness. We sent children to school, not to learn what they 
could find out, but to have their characters and their minds 
molded so that their opinions would be correct, accord- 
ing to the dominant notion of what correct opinions were. 
What to teach them became the great problem not how to 
help them learn what life was like, or what it was likely to 
become, or how to adjust themselves to live successfully 
in harmony with its changing social character. 

The system of mass production and mass distribution 
necessitates that all this shall be changed. It necessitates an 
entirely different approach to the individual problem of 
personal adjustment to society. And since the machine 
society is founded on fact-finding, it necessitates that the 
process of personal adjustments to it shall be founded on 
fact-finding too. 

This approach, in itself, must revolutionize all human 
relationships and the whole process of human education con- 
cerning them. Even parents must look upon their children 
in a very different way. Instead of being governed by what 
they imagine they would like to have their children be, they 
must get busy discovering exactly what they are. And instead 
of thinking of society with their traditional valuations, they 
must do their best to find out the character of the social 
order which is coming into existence. 


This process must continue in school. The system of giv- 
ing marks for good or poor scholastic performance is, I am 
glad to note, already under severe fire. The degree to which 
a child's mind agrees with the teacher's mind is surely no 
index of its educational progress, nor is its ability to absorb 
and repeat the formulas set forth in any textbooks. One's 
fitness for life can no longer be determined by the books that 
one has read, valuable and necessary as books may be. Yes- 
terday's wisdom can no longer be our guide. We must con- 
tinue to use it, of course, but to learn when to use it and 
when to discard it, in the working out of human problems 
which remain to be solved, must now become an accepted 
aim of education. 

I hesitate to give individual advice, but I do want to raise 
an objection to the sort of individual advice which is com- 
monly given the exhortation, for instance, which is so 
freely peddled out by so-called successful men, that youth 
should set its goal and stick to it. Some millions of American 
children have doubtless determined to be President, but it 
hasn't done them or American politics any good. There is 
no reason why we should have very many Presidents anyway, 
and about the most unfortunate selection we could make 
would be one who was determined to be President at any 
cost. Some of our worst failures are the constant readers of 
"success literature." I pity the unfortunate who has been 
miseducated to believe that success consists in "fighting his 
way to the top" or in seizing power which he is not equipped 
to use. Success consists in the most successful possible ad- 
justment between what a man actually is and the social order 
in which he will necessarily have to live, so that he will be 
able to make the greatest possible contribution to that order. 
The way to prepare for such success is not to imagine that 
one has powers which he has not, nor to aspire to positions 
which once symbolized success, but through finding out what 


human life actually is, and one's actual equipment to par- 
ticipate in it. 

It is quite possible, I think, that the three R's may soon 
cease to be the backbone of our elementary educational 
efforts. It is quite possible, it seems to me, that they will be 
supplanted by the sciences of hygiene, psychology and so- 
ciology. Adults, I know, are generally unacquainted with 
these sciences now, but it is quite possible that adults are 
too old to learn. We may have to leave them to their habits 
of life, habits which tend to physical, mental and social de- 
terioration so that human progress seems impossible often 
without an abundance of funerals. But children want to live. 
To cooperate with them in a genuine search for physical 
well-being seems to me to be an intelligent beginning. But 
they are equally anxious to grow mentally and emotionally, 
and psychological fact-finding would, I think, appeal to them 
much more than the compulsory learning of platitudes which 
neither they nor their teachers can possibly understand. 

Children, moreover, are not merely interested in but 
fascinated by life. They are so fascinated by it, in fact, 
that they refuse to believe that it is the dull, drab thing 
which adults represent it to be; and they construct imagina- 
tive worlds which suit their purposes much better. Their 
worlds are not static. They are worlds that are changed from 
time to time, by forces which grown-ups do not understand, 
and worlds to which children may adjust themselves without 
having to suppress their imaginations entirely. If we were 
to admit the truth, we might have to confess to the children 
that their world of imagination comes nearer to being real 
than does our world of cut-and-dried opinion. They, at least, 
imagine a world which isn't standing still, and in which the 
stick-in-the-mud grown-ups do not know all the rules; and 
we try to sell them in its place a world based upon marks in 
school in which they can be rated as "perfect" only when 


they are in one hundred per cent agreement with the text- 

How to live in a machine civilization is the problem be- 
fore every human being now, and successful personal adjust- 
ment to that civilization is the lifelong problem of every 
child. None of us knows the rules, and even if we find them, 
it does not mean that any problem is therefore permanently 

Everything that we learn merely brings us to more things 
which must be learned, and everything that we do to more 
things that must be done. In such a world, life is a never- 
ending adventure, and requires the conservation of all that 
is adventurous; but it is an adventure in cooperation, not 
merely with the other members of the family, or with im- 
mediate associates, but with the adventurous powers which 
reside in everybody, everywhere. It requires cooperation 
even with generations which have long since passed away; 
it requires cooperation in the interest of generations which 
are yet to come, and with the very forces of nature herself 
which, under science, are now being brought under human 

In such a world, everybody is related to everybody, as 
truly as the different members of the family were ever re- 
lated to each other; but these relations do not impose re- 
strictions, and satisfactory adjustment can not therefore be 
achieved through the negative process of self-suppression. 
They bring liberation, rather, and all the things to which 
the human soul, human nature being what it is, aspires. 



MANY have supposed that mass production would tend 
to eliminate competition and therefore greatly re- 
duce, and perhaps almost destroy, the huge business of mod- 
ern advertising. The facts have not borne out the supposi- 
tion. As mass production has increased, the business 
advertising has increased; and whether or not the mass 
producers have achieved a monopoly, they have seen the 
necessity of increasing, rather than diminishing, their 
advertising appropriations. 

Mass production is, however, changing the character of 
advertising, and is exploding many of the myths around 
which the advertising business was once quite generally 

The notion, for instance, that advertising is ' 'ballyhoo" 
was fostered by many of the early advertising agencies. Busi- 
ness men who wished to be modest were urged to scream 
their wares on the theory that, whether they liked it or not, 
the man who made the most noise was the one who would 
get a hearing. 

The late P. T. Barnum served as the patron saint of this 
school of advertising. "There's a sucker born every minute" 
served as its golden text. The theory was that few would 
spend fifty cents to see a circus unless they could feel, regard- 
less of what their common sense might tell them, that it 
was the Greatest Show on Earth; and that the ballyhoo 
which gave them this feeling was not a downright fraud but 
just a humane anaesthetic accompanying the otherwise too 
painful operation of extracting that fifty cents. 

Exaggeration was the keynote of such advertising. There 



seemed to be little point in a merchant's announcing a ten 
per cent cut in prices, if his rival across the way was an- 
nouncing a fifty per cent reduction. Even "one hundred 
per cent reductions" were not unknown in these announce- 
ments; but the advertisers were dealing with psychology, 
not arithmetic, and did not consider themselves obligated 
thereby actually to give away their stocks. 

In the patent medicine era, ballyhoo achieved the height 
of the ridiculous and the Barnum theory seemed to be con- 
clusively proved. Respectable periodicals which assumed to 
be the intellectual mentors of the nation brazenly announced 
concoctions guaranteed to cure all the diseases to which the 
flesh of man or beast was heir. It is not at all probable that 
human nature in those days was more vicious than it is 
today, but people generally supposed that business was the 
process by which some people took away wealth from others; 
and with that basic misunderstanding, it was hard for anyone 
to draw the line between decent and indecent practices. 

One might have a remedy for sale which he actually be- 
lieved to be good for coughs. But it would never do to ad- 
vertise it as simply good for coughs, when some competitor 
was proffering a sure cure, not merely for coughs and colds, 
but for consumption, catarrh and possibly for corns and can- 
cer and anything else which happened to begin with "c." It 
might be discovered by anyone who wanted to know that 
both preparations were mainly composed of bad whiskey 
anyway, and that repeat orders did not come from any cures 
effected but from physical cravings which the liquor had 
induced. But business was not operating on facts in those 
days; it was operating mainly on a theory of competition, and 
the most conscienceless liar was likely to set the pace. Con- 
scientious editors might hate to run such advertisements, but 
when conscienceless editors would gladly run them, what 
could the editor who had a conscience do about it? Usually, 


it seemed, he could do nothing, except perhaps to explain 
to his pastor that he was forced by competition to do a lot 
of things which he abhorred doing. 

Strangely, the days in which the press of America was most 
utterly prostituted to such vicious ballyhoo are often re- 
ferred to by those who should know better as "the great days 
of American journalism." There is no dearth of those who 
bewail the passing of the times when "fearless" editors so 
freely expressed their personal convictions in their editorials, 
and contrast them sadly with the present when the news- 
papers and magazines are supposed to be "mere commercial 

The modern newspaper, it is often charged, is "subsidized" 
by Big Business; and the newspaper often has a difficult time 
trying to prove that it is not. For actually, the charge is 
true, although its implications are as false as can be. The 
person who makes this charge, usually, looks upon Big Busi- 
ness and special privilege as almost synonymous terms. That 
is because he is thinking traditionally and, instead of find- 
ing out what the modern mass production industries actu- 
ally are, jumps to the conclusion that the newspapers in 
which they advertise extensively are not free to gather and 
record the news. 

As a matter of fact, these mass production industries are 
the very negation of special privilege, as anyone might dis- 
cover for himself if he would make the effort. It is not they, 
but the unsuccessful, old-fashioned businesses, which are con- 
tinually clamoring for special tariff concessions, opposing 
humane labor legislation or trying to intimidate their em- 
ployees at election time. Mass production industries are fact- 
finders. Their success is based upon fact-finding. They do 
not ask or want acquiescence, even on the part of their own 
employees, and are trying to eliminate the yes-man as rapidly 
as they can. These industries want to know the truth, and 


a newspaper which attempts to hide or distort the truth 
thereby belittles its value to them. 

There are, of course, many big businesses which have not 
yet fully arrived at this understanding of business needs, but 
the tendency is definitely and demonstrably in this direction. 
Big Business, in America at least, instead of exercising a 
censorship over the press, is more and more demanding that 
the newspapers tell the truth, no matter how inconvenient 
or disagreeable the truth may sometimes seem to be, just 
as it is demanding that untruthful advertising be excluded 
because it causes distrust of even the truthful advertising. 

It is true that great newspapers are subsidized. They must 
be subsidized in one way or another. To attain a large cir- 
culation, they must be sold to readers for a mere fraction 
of what it costs to gather the news and print it, often for less 
than the cost of the white paper which is used. If this deficit 
is not made up through advertising, it must be met in some 
other way. In America it is met by advertising. In France 
and some other countries it is met by subsidies from political 
or other special interests or by the owner of the periodical, 
who must be a very rich man, and one who is willing to pay 
out huge amounts annually for the sake of having a personal 
organ expressing his ambitions and his special political and 
social theories. 

It is futile to deny this subsidy, or to claim that it does not 
constitute an economic pressure which the newspaper must 
recognize. Those who pay for a paper are bound to control 
its policy; and if a paper is a personal indulgence, something 
in the nature of a private yacht, it is bound to be a very 
different sort of paper than if it is being subsidized by busi- 
ness in general. In one case, it will be free to indulge in 
any propaganda which suits the will of its personal owner; 
and if the owner happens to be a high-minded, public- 
spirited superman, it may become an excellent journal. In 


the other case, what the paper will be free to do will depend 
upon the needs of business and whether business is best 
served by propaganda or by facts. 

As it actually works out, the great French journals are un- 
questionably freer than are the newspapers of America to 
indulge in private crusades; but they are not so free to 
publish news which might jeopardize such crusades. In 
America, the largest and most successful journals are more 
free to print all the news from everywhere than are the news- 
papers of any country with which I am acquainted. 

This is all contrary to the theories of the theorists. With 
the power interests, for instance, buying full-page advertise- 
ments in the New York dailies, it might be supposed that 
these papers would suppress the news of the Congressional 
investigations of those interests, or at least of the attacks 
made upon them by minority political groups. As a matter 
of fact, however, all such news is regularly printed, the ad- 
vertisers understand that it will be printed, and modern 
business seems to have abandoned all efforts to keep such 
news from being printed. 

This is nothing short of amazing to those who have figured 
it out with apparent logic that a periodical controlled by its 
advertisers must be subservient to special interests. The 
mystery vanishes, however, when one remembers that mod- 
ern business is not a special interest. Modern business is the 
effort to get to the public the things which the public wants, 
and it has discovered that the way to do this most success- 
fully is the way of fact-finding. Within this business system 
are many men of many minds minds so different that they 
could not possibly agree upon any platform of opinion but 
they can agree, and they are more and more agreeing, to let 
fact-finding take its course. There is no unselfishness in this. 
If it were possible, to be sure, some special interest might 
like to make the great newspapers particularly subservient 


to themselves, but none would have any use for a papei 
which was specially subservient to some other interest. Such 
a publication, they know, would have little value as an 
advertising medium; and since they spend huge sums for 
advertising, they want to know that the space they pay for 
has business-pulling power. 

I do not wish to idealize the American newspapers and 
magazines. I am speaking rather of a development than of 
a thoroughly achieved reform. For every reliable newspaper 
or magazine, one may point to some other publication whose 
standards still hark back to the patent medicine age. But 
these, even when they attain huge circulations, are not con- 
sidered valuable advertising mediums. The most valuable 
periodical is the one which is so thoroughly subsidized by 
business in general that no special advertiser, no matter how 
rich and powerful, will be allowed an inch of space in which 
to make the slightest misrepresentation. 

Advertising, to be sure, has not yet become a science. But 
as mass production, with its search for facts, has been de- 
veloping, advertising has surely taken on a new character. 
The ancient ballyhoo has been largely relegated now to 
the publications which even their own readers do not read 
very seriously. More and more it is becoming recognized 
that only strictly truthful advertising pays. It may still be 
true that a sucker is born every minute; but it is the wise 
customers those who return again and again because they 
have learned where to get their money's worth who build 
up a business, and modern business is making a real effort to 
educate the masses into wise buying. 

It is still supposed by some business men that successful 
advertising costs a lot of money, and it is still supposed by 
some theorists of business that concerns which spend mil- 
lions annually for advertising must necessarily make up for 
it by charging higher prices for their goods. To consider 


advertising in terms of its cost, however, is misleading. Ad- 
vertising is the articulation of business. It is the way by 
which a business makes itself known. Actually, good adver- 
tising costs nothing, for the alternative is not to save the 
money which might be expended in advertising, but to re- 
main unknown and therefore unable to do a profitable busi- 
ness. The intelligent, large-scale, truthful advertiser is able 
to sell and therefore able to buy in such large quantities, 
and thus effect such savings and such a reduction in overhead 
expenses, that he is able to make prices to the consumer 
even lower than if he had not advertised. One might as well 
speak of the cost of a child's learning to talk. Undoubtedly 
learning words requires a certain expenditure of energy, 
but the child who does not spend the energy required does 
not and can not hope to save it for some more desirable end. 
Like the business man who does not advertise, he will sim- 
ply remain dumb. 

Advertising, always necessary to business, is doubly neces- 
sary to the mass production industries. When business was 
confined to small communities, or to a limited number of 
patrons who could be reached by personal representatives, 
advertising as we now know it was uncalled for; but when 
the main objective of business is to serve the masses of hu- 
manity everywhere with the greatest possible service which 
fact-finding methods can disclose, it is necessary that the 
masses be taken into the fullest confidence. Advertising then 
will become much more than an appeal for patronage. It 
will become an appeal for understanding and for consumer 
cooperation. It becomes news of first importance news as 
to how the business is managed, and why, news regarding 
wages paid and the plans on foot for making them still 
higher, news concerning the economies effected and the new 
services which are thus made possible, and the most accurate, 
comprehensive news of matters which business once sought 


to keep a business secret the full story of how the business 
is financed and where the money really goes. 

Under mass production all these things are not merely 
matters of public interest, but it is necessary for the greatest 
success that the public shall be interested. The business 
which is not constantly telling its story to the public in- 
evitably gets out of touch with the public and becomes un- 
able to serve the public well. Courageous, truthful advertis- 
ing is the answer. 

There are things, to be sure, in many industries, which the 
owners will not wish to advertise, and the concern which 
does not advertise may keep such things from being known. 
But that will answer no problem. It can result only in keep- 
ing up the bad practices which will inevitably lead to fail- 
ure. Large-scale advertising makes it necessary to correct 
such errors, for it compels the advertiser to make good on 
every claim. 

Yes, it costs money to make this intimate and constant ap- 
peal to a larger and ever larger public, and the business 
which does it must equip itself to serve a larger and ever 
larger public. That is, it must adopt fact-finding, mass pro- 
duction methods. Mass production, then, not only makes 
large-scale advertising necessary, but large-scale advertising 
makes mass production necessary. In other words, instead of 
adding to the price of the articles advertised, it makes it 
necessary to produce and distribute those articles at the 
lowest price which better methods and larger sales make 

Fortunately, the average American housewife does not 
need to be told this. She has already learned to buy the 
highly advertised items of merchandise. It is her more 
theoretical husband who is likely to come home with some 
non-advertised substitute instead. In the argument which 
follows, the theorist may seem to win, for it may be difficult 


to see at first how those who spend millions for advertising 
can give better values than those who do not indulge in any 
such "expense." Facts, however, have a way of overriding 
theories; and the better values made possible by mass produc- 
tion and mass distribution, often initiated and always assisted 
by mass advertising, continue to dominate the market. 



TO SUGGEST that physicians must adopt the principles 
of mass production is to take such great chances of 
being misunderstood that no one excepting possibly the 
comic artists may benefit from the suggestion. Neverthe- 
less, I am taking the chance. 

Let me hasten to add, however, that I do not favor the 
bringing in of patients on conveyor belts, before long lines 
of surgeons with uplifted instruments, each understanding 
nothing about the operation as a whole but each trained 
to make one particular cut in each particular body at the 
precise moment that it comes within his reach. Nor do I 
claim that much could be accomplished, either for the pub- 
lic health or for the economic betterment of the medical 
profession, by the installation of mass production methods in 
the manufacture of pills. 

Mass production is not a mere detail of factory technique. 
It is a universal principle. It consists of the organization of 
human knowledge, under the most scientific direction, to 
supply the needs of the masses by the most satisfactory and 
most economical method in which they can be supplied. 

The greatest, or at least the most basic, of all human needs 
is health. Physicians all recognize this. They need no one to 
arouse their interest in the project, and they are committed, 
in the very nature of their calling, to the use of scientific 
methods in diagnosis and treatment. It would be the rankest 
presumption for me, a mere business man, to undertake to 
criticize the science of healing. I know, of course, that doc- 
tors make mistakes; but they are employing fact-finding 
methods to correct those mistakes, and that is the best assur- 



ance which can possibly be given that the mistakes will be 
discovered and corrected. 

A business man may, however, criticize the business of 
healing. The healing business is still badly organized. It is 
suffering, in fact, from the very things with which all un- 
successful businesses have been suffering since the advent of 
mass production disclosed the fact that a business, to be 
successful, must organize to give the greatest possible service 
to the masses at the lowest possible price. 

Fortunately, many leading physicians already recognize 
this. The Committee on the Cost of Medical Care, with head- 
quarters in Washington, cites figures indicating that the 
total annual loss through illness in the United States, in- 
cluding the loss of future net earnings on account of pre- 
mature deaths, amounts to more than $15,000,000,000, while 
the total amount of physicians' fees is only $750,000,000. No 
one, of course, assumes that all these fifteen billions could 
immediately be saved, no matter how efficiently the medical 
profession were organized. But the figures indicate that there 
are ample economic opportunities for the healing business, 
if it were organized to produce health for the masses as effi- 
ciently, say, as the automobile business is organized to pro- 
duce transportation for the masses. 

At present, however, with all this urgent need of health, 
the total income of the average physician is so low, and his 
chances of increasing it so precarious, that many are claim- 
ing that the profession is overcrowded. 

There can be no question as to the masses' wanting health; 
and they would gladly pay many billions of dollars to get it. 
They are paying billions as it is; but they are not paying, 
as a rule, for what they want but for what they most de- 
cidedly do not want. They are paying, not for health, but 
for sickness. 

The high cost of medical care being what it is, millions 


do not call a doctor until they have to, and then they need 
so much attention from a business which is not organized 
on a mass production basis that the high cost of medical 
care is what it is. 

While the cost of medical care is far too high, however, 
the income of our physicians is far too low. 

By no possibility can the economic aspects of this or any 
other profession be ignored. Our doctors have surely shown 
themselves to be public-spirited, self-sacrificing, charitable; 
but they must live if they are to practice and, unless there 
is money in it, the medical profession can not make much 

There is not much money to be had, however, in working 
along the traditional lines of the medical profession. The 
economic opportunities for physicians lie, not in giving 
extraordinary service to those who can pay large fees, but 
in eliminating the economic wastes of sickness. The masses 
can not pay high prices for anything. Doctors' bills, how- 
ever, are doubly burdensome, for they come in periods, 
usually when one's income has stopped. 

The medical profession, then, is peculiarly concerned with 
the maintenance of general prosperity. Doctors might have 
more work if everybody else were ill; but if everybody else 
were ill and consequently out of work the doctors, with 
plenty of work, would have to work for nothing. They could 
not collect their bills, at least, until people got back to 
work; and even when they got back to work, there would 
be so many other bills to pay that the doctors might easily 
be overlooked. Every doctor knows this. Most of them have 
learned it from experience. If there is to be a large income 
for the healing business, then, it must be looked for, not 
from those impoverished by illness but from those who are 
able to pay. 

This is where the principles of mass production come in. 


For only a few are able to pay high fees; and what the masses 
are able to pay depends upon how well buying power is 
being distributed. They can not pay $5,000 for automobiles 
and they could not pay $500 unless the car in question was 
a thoroughly good car. But they can and will pay $500 for 
good cars; and because they can and will pay that much, it 
is possible to offer them a car for that money, and a much 
better car than could be offered for $5,000 if the masses were 
not buying cars. 

They can and will pay a certain amount for medical care, 
if it is first-class medical care better care, say, than the 
average wealthy person can secure for many times the money 
today. They can't pay even this, of course, if they are sick, 
any more than they could have bought automobiles if they 
had been unemployed. But the automobile business organ- 
ized employment. It organized to create wealth which wasn't 
being created and to distribute that wealth through dis- 
tributing buying power. The process paid hugely. The medi- 
cal profession, if it follows the same principles, has an equally 
good opportunity. 

It must, of course, distribute bill-paying power, at the same 
time that it is making those bills as low as the scientific 
organization of healing can make them, and learning to give 
better values in actual health production than it can now 
give for its high fees. 

And this can be done. It is exactly what mass production 
does, wherever it is applied, and the mass production of 
health need be no exception. It can not be done, however, 
so long as health production is carried on by individual 
craftsmen, or general practitioners, or by individual spe- 
cialists who are not organized to produce healthy bodies 
but are independently in business to produce good heart- 
action, good throat conditions or good digestion, as the case 
may be. 


This, to be sure, is the age of the specialist, and the days 
of the general practitioner are numbered. But there is this 
to be said for the general practitioner. When one took one's 
body to him to be repaired, he might not be able to repair 
it, but he at least knew what his patient wanted. He knew 
that his patient wanted a body that could work; and if the 
whole body didn't work, he kept on tinkering, no matter 
how thoroughly he may have fixed up certain parts. Today, 
however, one may have to shop indefinitely among special- 
ists; and he may have a dozen separate bills to pay for re- 
pairs which, no matter how skillfully made, still leave his 
body quite as useless as it was when the alterations began. 

The obvious answer to this human need is group medi- 
cine, but such an organization of group medicine as has 
hardly yet been contemplated. It must, moreover, be low- 
cost group medicine health production at the lowest pos- 
sible cost. As every doctor knows, however, curing the sick 
is much more costly than preventing sickness; so the mass 
production of health will give first attention to keeping 
patients well. 

If all the health production forces in every community 
were organized into such a health conserving service, three 
things would surely happen. Those who were shopping for 
health would, in the first place, be certain of better advice 
and more scientific attention than any general practitioner 
or any number of specialists acting independently could give 
them. Secondly, great masses could afford, and could easily 
be persuaded to take advantage of, such service; and thirdly, 
these masses would be so much better off financially by vir- 
tue of being kept in good working condition, that they would 
be able to support a far more elaborate and efficient system 
of health production than it would at first be possible to 

Incidentally, with health production organized on any 


such modern business basis, there would be little need for 
the constant propaganda, so necessary at present, to keep the 
public from consulting quacks, from dosing itself with 
patent medicines, from joining weird health cults or from 
following the diagnosis and advice of anyone it happens to 
meet, instead of consulting the medical profession. As a mat- 
ter of fact, it is difficult to consult the medical profession 
today, even if one has money to spare. About all that the 
average patient can do is to consult some doctor, or some spe- 
cialist, who, because he is trying to conduct a little business 
of his own, can not immediately place before the patient all 
the advantages which medical science has to offer. Critical 
cases, to be sure, may be sent to hospitals; but year-round 
health service, excepting to the degree that individual doc- 
tors are trained to give it, is a difficult thing to find, even at 
high prices, and it is not available at all at prices which the 
masses can now afford to pay. 

It is often said, to be sure, that people generally are so 
perverse by nature that they will almost surely neglect their 
health. There is no proof of this. When anything, however, 
no matter how valuable it may be, costs very much, people 
of limited means are forced to go without it if they can. 
This is a general economic principle, by no means confined 
to the buying and selling of health. Wherever the masses 
have no money to buy good clothes, they neglect their per- 
sonal appearance; and when travel is costly, they suppress 
their desire to see the world and become provincial minded 

Those who do buy costly things, moreover, even though 
they be ever so valuable, can not spend their money in 
other ways and can not contribute as they might to the gen- 
eral prosperity. The high cost of medical care, therefore, 
does not mean hard times merely for the families which 
pay the bills. It means hard times for doctors, too, because 


it keeps so many people from consulting doctors when they 
should; and it causes unemployment and depression in all 
the industries manufacturing things which those who are 
spending their money on doctors' bills want but have to go 

There are health centers already, I am glad to note, in 
most of our principal cities, in which practitioners in many 
lines are combining to treat the sick at more reasonable 
prices than the masses have had to pay for such excellent 
service before. But this, it should be quite clear, is not 
enough. What is needed is an even greater combination 
to keep people well. In every city, and even in the rural 
districts, the medical profession must organize with this in 

I think it altogether probable, when the health experts 
are once organized for the mass production of health, that 
they may find it poor business to charge, not merely high 
fees, but any fee at all, for surgical operations and the emer- 
gency attention needed by the very ill. For it is health that 
people want, not operations. To induce them to pay for it 
regularly might, of course, necessitate considerable re-educa- 
tion; but after all, it is a selling job not obviously beyond 
the possibilities of salesmanship. The great necessity is that 
the health business shall have high-grade, low-cost health to 

Health, however, is not an individual matter and can not 
be dispensed by individual practitioners. Even to spread 
the principles of personal hygiene is not enough. The suc- 
cessful administration of health is sorely needed and not 
mere political administration but a scientific administration, 
organized on the fact-finding principles with which the 
medical profession has become so well acquainted not 
merely for the expensive treatment of helpless persons who 
can not afford the expense, but for the production and sale 


of health to the masses who, if they get it, can then well 
afford to pay for it. 

If the masses pay for sickness, it must be remembered, 
they exchange their wealth for something which they do not 
want, and are necessarily in a position in which they can 
neither produce more wealth nor buy those things which 
give wealth-producing employment to others. If, on the other 
hand, they pay for health, and get it, they may not only go 
on producing, but they may also go on buying and thus con- 
tributing to general prosperity. With such an understanding 
of actual conditions, the healing business can not long defer 
a much needed scientific reorganization looking to the highly 
profitable mass production of health. 

Most unselfishly today, doctors who realize the social char- 
acter of health, lift their voices for better public sanitation, 
more room and more playgrounds for children, better hous- 
ing and better industrial conditions, and for all sorts of 
reforms by which their own medical practice may be re- 
duced. This unselfishness, however, is opposed by ignorant 
selfishness, and their campaigns are ineffective; and the 
physicians are compelled to go on treating patients whom 
they can not help because they can not change their patient's 
unhealthful environment. With the whole profession concen- 
trating upon the facts of the situation, however, instead of 
upon its sentiments, we may reasonably hope for a great and 
sudden change. When they make it plain that sickness is 
not mere personal hard luck, and that it is economically 
ruinous to labor and capital, to taxpayers and to consumers 
and to the medical profession itself, they will open the way 
for enlightened selfishness to act in an enlightened way for 
social betterment. Doubtless it will be a long time before 
disease can generally be conquered, but the organization of 
the healing business on actual fact-finding and fact-recogniz- 
ing lines will bring us incalculably nearer the goal. 


WHEN one suggests the mass production of houses, a 
dreary picture will inevitably enter many minds of 
street after street of dwellings all alike such deadly monot- 
ony and uniformity that, even if they are well-built homes, 
with every modern convenience, the spiritual effect must be 

It is well to remember then that there are such dreary 
sections in almost all our cities, and that they are not the 
products of mass production. They are not even well-built 
and serviceable. While mass production is production for 
the masses, and inevitably pays first attention to what the 
masses really want, these barracks and hives for the poor, 
and the scarcely less inspiring rows of more expensive uni- 
formity for those not quite so poor, have been built as a rule 
by get-rich-quick promoters with an eye to giving the least 
possible service for the highest obtainable price. 

Mass production is the culmination of machine produc- 
tion, but these houses are not even produced by machinery. 
Almost invariably they are handmade. While mass produc- 
tion is continually discovering less and less costly methods of 
production, the cost of home-building under these tradi- 
tional methods is more than in former years. Employees in 
this industry get higher wages than they used to get; but 
since they are doing things in much the same way that they 
used to be done, the output per man has not increased. The 
only way it could be increased under such conditions, in 
fact, would be through speeding up, and that is a method 
of increasing production which has long since ceased to 
work. If every worker were to work to the limit of his 



strength, and methods were not improved, not much could 
be gained, for such a course would inevitably tend to fatigue 
and breakdown; but even if this were not so, it would be 
bad policy to try to force employees to work like that. When 
employers organize to get all they can out of their workers, 
the workers inevitably organize to get all they can out of 
their employers; and when employers are forever trying to 
make them work as hard as they can, they are forever looking 
for ways and means of taking things as easy as they can. 
Only when industry is organized to eliminate unnecessary 
effort can it be most successful. Only then, in fact, can con- 
tinuous employment be assured. Work is notoriously un- 
steady in the building trades. 

Anything which tends to "make the job last" tends to 
make it the last job; for such a course compels high prices, 
restricts purchasing and makes it difficult for the consumer 
to order more work done. On the other hand, anything 
which tends to get a job done in the simplest and most 
effective way in which it can be done conserves the consum- 
er's dollar and makes it possible for him to satisfy more 
wants and thus to provide still more employment. 

But what is "the job?" In the building industry, tradi- 
tionally, the job has seemed to be the building of a house, 
and the industry, it has been supposed, knew how to build 
houses. In the mass production industries, the job has 
been the supplying of some human want; and the mass pro- 
duction industries are organized on the theory that no one 
yet knows how those wants can best be supplied. The mass 
production industries are, therefore, finding out, while the 
home builders, apparently, have considered the question as 
having been settled so long ago that it isn't necessary to 
analyze the actual conditions in modern America to find 
out what the would-be householder really wants. 

This is not wholly true, of course, for builders have no- 


ticed that people want bath rooms and furnaces and electric 
lights; and they stand ready to provide houses with such 
improvements, if buyers are willing to pay extra for them. 
But people do not want to pay extra. They want houses 
with these modern conveniences for the price of houses 
in which they used to live and which had nothing of the 
sort. To the building industry, this may seem to be an ut- 
terly unreasonable demand, and so nothing is done about it. 
To the mass production industries, it may also have seemed 
to be an unreasonable demand, but something is done about 
it. The purpose of industry is not to satisfy human reasons 
but to satisfy human wants. Explanations as to why we can 
not have our wants supplied may be perfectly satisfactory 
to our intellects, but such explanations will not make us 
buy; and unless we do buy, business can not sell. The auto- 
mobile industry has prospered by finding out how to sell 
cars meeting all modern demands for a fraction of the price 
of the earlier and clumsier models. 

The building industry has not even asked itself the ques- 
tion: Where do the people to whom we are trying to sell 
houses really want to live? And where, in fact, are they going 
to live, whether they prefer it as a locality or not? These 
would seem to be important questions, for it would seem 
difficult to sell a man a home in Philadelphia if he was about 
to move to Chicago; but the building industry pays little 
attention to that. There was a time, they know, when people 
customarily settled down wherever they built their homes; 
and the home-providing industry seems not to have noticed 
that that time has passed away. The masses are on the move 
today. It is impossible for a large percentage of them ever 
to settle down for life in one particular spot. They either 
have to go, or it is highly advisable that they should go, 
where they can get good jobs, and modern industry is in 
a state of flux. It is constantly centralizing and decentraliz- 


ing, calling multitudes hither and thither, and making it 
impossible for them to establish homes in the old traditional 

I am not speaking of a "floating population" nor of fly-by- 
night factories which locate here and there for the purpose, 
chiefly, of selling stock to gullible home-town boosters. In- 
dustrialism is not nomadic. It is established firmly in the 
community which it serves; but this community is no longer 
a fixed, geographical center. It may be nation-wide or even 
world-wide in its character, and its citizens are increasingly 
under the necessity of living, not with reference merely to 
some particular municipality, but with reference to their 
position in the nation or in the world. 

When they buy a home, however, they are compelled to 
think in terms of residence in one particular spot. If their 
means are limited, such a home may easily become a mill- 
stone about their necks. Pittsburgh, for example, might de- 
cline, not because the steel industry is declining but because 
it is expanding and finds that it can serve the world more 
effectively by building up in Birmingham. If such a thing 
should happen, thousands of Pittsburgh home owners would 
lose their homes through no fault of their own or, by refus- 
ing to move when their jobs do, would actually become 

It is only natural, of course, that people should think of 
home in terms of some particular spot, for when agricul- 
ture was our way of life, it was necessary to settle down, 
geographically, and grow up with the community, if we 
hoped to make our social position secure. But industry is 
now our way of life; and if we do not move when industrial 
opportunity calls us, we detach ourselves from the com- 
munity in which we really live and move and have our 
being, and, by hanging on to the formula of "home," actu- 
ally deprive ourselves of its spiritual reality. 


There are many towns in America which boast about the 
large percentage of their population who own their own 
homes. It may be nothing to brag about. It may simply mean 
that workers have stuck when they could have bettered them- 
selves by going elsewhere, because their savings were tied 
up in a house and lot which they could not bring with them 
and could not sell for anything near the amount which they 
had invested. When a large industry dies or moves, it is 
likely so to depopulate a town that people may be able to 
buy houses there for very little money, and they may imagine 
that they are buying homes. But this can not make them 
homes. To become homes, they must be houses in which 
families can live without sacrificing their economic security, 
and economic security now rests in industry instead of in 
geographical locality. 

The business of housing, however, seems to get its tips, not 
from actual industrial evolution but from the real estate 
business the business of selling locations to masses who can 
not locate. And if large numbers refuse to become static in 
a moving world, it is assumed that they do not want homes. 
I see no evidence to support this. It seems to me that human 
beings yearn as much as ever for the things which home once 
provided but which a mere house and lot can not. They 
want stability in their lives. They want a sense of belonging 
to the community and being a part of it a feeling which 
mere residence can no longer give. If the housing industry 
would only analyze this need, and determine to fill it by 
modern mass production methods, the housing industry 
would take on new life. 

No mere local real estate promoter could, of course, do 
this. It would require a nation-wide building business, inter- 
ested not in gluing families to some particular spot but in 
serving them to the best of its ability. It would not care 
where its customers lived; but it would keep in touch with 


industrial development and be ready with good housing at 
the lowest possible price in the places to which industry 
would constantly be drawing them. Such a concern would 
probably not try to sell locations. It would sell equities, 
rather, in any city in which a customer was working, with 
the provision that, if he wished to move to some other city, 
he could exchange his equity for its equivalent in the latter 

If industry were to desert any particular community, of 
course, there would be a great loss involved in the deprecia- 
tion of houses there. But this loss should and could be 
equalized, perhaps, by insurance, instead of falling, as it does 
today, upon those who have made the mistake of investing 
in a permanent location when what they really wanted was 
a permanent home. In the larger communities, of course, 
while industries are constantly dwindling or moving out, 
other industries are constantly expanding or moving in. But 
the hapless home owner of today is not usually in a position 
to take advantage of this. He is likely to be a machinist or 
an electrician, and it is unreasonable to expect him to be a 
business man as well; and it is unlikely that he will be able 
to sell his home on fair terms to himself, even in a city where 
the market, if sales are not forced, may be fairly good. The 
housing business should attend to the business of providing 
homes, and should accept its business responsibilities, instead 
of making money, as it so often tries to do today, out of the 
desperation of families who have to move and abandon their 
properties immediately. 

With housing organized on a nation-wide scale, and with 
first attention given to the actual human needs involved, 
there is no reason to suppose that the building industry 
could not improve its technical methods quite as success- 
fully as other mass production industries. To preserve the 
ancient methods, or even the conventional forms, would be 


no part of its program. Anything which could be done better 
by machinery than with the old-fashioned tools of handi- 
craft would be done in factories, and machines would con- 
stantly be designed to do them better yet. The finished prod- 
uct might look no more like the houses of today than the 
modern automobile looks like a horse and wagon, or the 
radio like the town crier of another century. But they would 
be, first, quite as much more serviceable; and secondly, they 
would become more and more beautiful as the industry 

For man wants beauty. The masses heretofore have had 
little opportunity to achieve it; but where conditions have 
provided men with wealth and leisure they have demon- 
strated their preference for beautiful things. Mass produc- 
tion is now providing wealth and leisure for the masses, 
and since mass production is production for the masses, it 
must give attention to their aspiration toward the beautiful. 
Old-fashioned production did not do this because it did not 
have to. It built beautiful mansions, but it built them for 
the classes; when it built for the masses, it built rude huts 
and slums. 

We may be sure then, that the housing industry under 
mass production methods will avoid monotony and uni- 
formity, but it will strive for harmony. Large-scale planning 
will make such harmony possible. A beautiful house, like 
a beautiful garment, may become ugly if it does not har- 
monize with its environment; but harmony, when it is 
achieved, does not destroy individuality but heightens it. 
The artist and the architect, we may be sure, will hold an 
important position in the counsels of the mass production 
housing industry; but they will be artists and architects who 
know that beauty is achieved, neither through sticking un- 
thinkingly to no longer meaningful forms, nor through an- 
archistic self-expression by which a number of houses today, 


each a sincere attempt to achieve beauty by itself, may so 
swear at each other and at the surrounding landscape as to 
make the general ensemble a hopeless eyesore. 

Just what a thoroughly serviceable and beautiful home 
should cost when the technique of mass production shall 
have been discovered and applied, is of course a matter of 
speculation. That ten thousand dollar houses could be built 
and sold profitably for $1000 would seem to the conven- 
tional builder to be a silly statement. He will say that the 
material alone must cost much more than that, that trans- 
portation may cost as much again and that the labor in- 
volved would cost several times as much. Nevertheless, one 
can buy an incalculably better car today for $500 than he 
could buy for $5000 a few years ago. Only when traditional 
thinking is abandoned, and industry sets out to meet the 
needs of the masses at prices which the masses can and will 
pay, can we ever know how abundantly those needs may be 

It is certain that millions of people would order houses 
built, if they could get them for such a figure and could 
readily exchange them, if they had to move, for equally good 
houses in the place to which industrial opportunity was 
calling them. No member of the building trades, then, 
would be out of employment, excepting those who might 
refuse to engage in building unless building were carried 
on by the old conventional formulas. Industry can not stick, 
however, to the old conventional formulas. If it does, it 
creates no new wealth, and the old conventional standard 
of living is the most that we can hope for; and under the 
old conventional standard of living, the masses could not 
live in decent homes and could not give much profitable 
employment either to builders or to producers in other 

Only mass production can solve the housing problem, and 


only mass production can solve the problems of the housing 
industry. For only under mass production production for 
the masses do the problems of producer and consumer be- 
come the same. 



A GRICULTURE, as we are constantly reminded, is not 
JL\. an industry so much as it is a way of life. This is an 
important point. Unless it is taken into consideration, any 
program of farm relief will almost certainly land us in con- 

But industry also is a way of life. It is a different way of 
life. It is a much more profitable way of life, at least as far 
as material results are concerned, although many still de- 
voutly believe that the agricultural way of living is spirit- 
ually much better. 

The trouble with most of the programs for farm relief 
is that they try to preserve the old way of life and, at the 
same time, achieve the new prosperity. This simply can't 
be done. If the old way is preserved, the best that we can 
hope for are the old results. The ox cart was one way of 
transportation. The automobile is another. As far as speed 
and comfort are concerned, the motor car is highly prefer- 
able, but there may be many sentimental reasons why one 
does not wish to give up the old ox team. It is foolish to 
argue that sentiment can not be considered. Sentiment can 
be and is considered in the solution of many human prob- 
lems. What we can not hope for, however, is to make the 
ox team keep up with the automobile. Even if, by some 
miracle, we could get the hitherto deliberate beasts to pull 
us sixty miles an hour, the results would still be unsatis- 

If an ox team should get stuck in the mud, a motor car 
might pull it out. It would not follow, however, that the 
best way to haul loads is to hitch a motor car in front of 



every ox team. Such a method, in fact, is not the best method 
of driving oxen. It neither gets the job done as efficiently as 
it might be done nor preserves the ancient way of doing it. 
All it preserves, at most, is the semblance of the ox cart sys- 
tem; and it preserves that only in the minds of those who 
refuse to look at the whole set-up. 

This confusion of the old way and the new is not only 
widespread today, but it has become chronic in American 
agriculture. Much machinery has been brought to the farm: 
but it has been brought there, as a rule, not to pull the 
loads which machinery might pull, but to pull the machinery 
which once pulled loads but which, in a machine civiliza- 
tion, can not pull successfully. But the new arrangement is 
not pulling successfully either; hence all sorts of programs 
are being launched to get the government to pull the ma- 
chine which is pulling the ox which isn't pulling the load. 

To rid ourselves of this confusion, it is necessary only 
that we note the exact difference between the agricultural 
and the industrial way of life. If we prefer the old way to 
the new, there are still some places on earth where the old 
way might be followed. Not many Americans could follow 
it, however, and fewer still would care to, for the old way 
of agriculture, at best, could not produce much wealth. It 
could and did, however, produce a degree of independence 
which is utterly impossible in industry. 

The American farmer still seems to idealize this inde- 
pendence. If he had it, he might not think so highly of it, 
for he would necessarily have to get along without a lot of 
things which he has learned to like. He could not, for in- 
stance, have any farm machinery excepting such implements 
as he might be able to make on his own farm. Of course he 
could not have telephones or newspapers or radios, electric 
light and power, automobiles, railroads, or even anything to 
eat or wear which he and his family could not produce out 


of raw materials on the farm. All such things are the product 
of large numbers of people getting together, pooling their 
knowledge and cooperating in such a way that they become 
dependent upon one another. Independence and wealth are 
mutually exclusive. If we hope to get one, we must give 
up the other; and all efforts to achieve independence are 
necessarily in the direction of hard labor and a low standard 
of living. 

Mass production, which is the most successful form of in- 
dustry, is the extreme opposite of independence. It means 
complete dependence upon the masses complete interde- 
pendence, and therefore the highest possible standard of 
living for everybody. It means achieving wealth through dis- 
tributing it. It involves paying the highest possible wages 
and selling the product at the lowest possible price. If it 
doesn't mean loving others as we love ourselves, it at least 
means thinking of others first, in our own self-interest, and 
serving ourselves best through serving others best. 

It doesn't mean unselfishness. It means simply the dis- 
covery of better and more successful methods of getting what 
we want that is, if we want prosperity. If we want inde- 
pendence, of course, and do not care for prosperity, mass 
production will not help us in the least. The point is that 
we can not have individual independence and prosperity 
too, and no machinery has ever been invented which can 
help us get them both. 

Farmers, however, can have a sense of independence, if 
they are determined enough. They can get that by tradi- 
tional thinking by refusing to look realities squarely in 
the face. Remembering that agriculture is a way of life, they 
may assume that, because they are farmers, it will not be 
necessary for them to learn any other way. They may be 
"progressive," after a fashion. They may buy modern ma- 
chinery. They may combine to limit production and to 


keep prices up. But all this, at best, can amount to mere 
temporary relief. If they wish to succeed in this world of 
mass production, they must abandon not only ancient de- 
vices but ancient viewpoints and apply the principles by 
which success is now attained. These are the principles of 
mass production. 

I do not mean to criticize the farmers for trying to hang 
on to the notion of independence, in a world in which actual 
independence has become so impractical. Thousands of busi- 
ness men, with far less excuse for doing so, are making the 
same attempt. They are attacking the chain stores for "taking 
away their independence" and are appealing to the public 
and to the government to bring it back. This is in spite of 
the fact that merchants never were and never could be inde- 
pendent, while farmers, once upon a time, could be and 

Trade, from its very beginning, required two parties. 
Farming needed only one. A farm family might produce 
the necessities of life and consume them, without consulting 
any outside interests; but a commercial firm, in the very 
nature of its position, had to deal with the outside world 
in order to make a living for itself. 

Even today the farmer has a constant suggestion of this 
independence, particularly if he is running an old-fashioned 
farm with land devoted to many different crops and keeps 
a few cows and hogs and chickens and sheep. He can not, to 
be sure, make money on such a farm, and he could not for 
very long make a living on it if it were walled off from 
the rest of the world and all communication with it stopped. 
But he could go on living for weeks and months, perhaps for 
years, a thing which the human groups who compose our 
greatest and most powerful business corporations could not 
do if they were suddenly isolated from the rest of society. 
The employers and employees of the United States Steel 


Corporation or of General Motors, if left to their own 
devices, could not take care of each other for a single week, 
because they are not equipped to provide themselves di- 
rectly with the elemental necessities of life. They must deal 
with farmers before they can live at all. It is only natural, 
then, that farmers should think of their "independence," 
while quite absurd that business men should apply the 
term to themselves. 

Farmers are independent, however, only to the degree 
that they abstain from business. The moment they think 
of selling their products, they begin to leave the old way 
of life and begin to take on the new. While agriculture, 
then, is one way of life, and business another, the business 
of agriculture is not the agricultural but the business way. 

We can get nowhere, surely, in the solution of the farm 
problem, if we do not know what we are talking about 
when we speak of farming. Do we mean the system by which 
a family can wrest a bare living from the soil? Or do we 
mean a system of producing and distributing food success- 
fully? These are two very different things. One involves 
staying out of the machine civilization and becoming inde- 
pendent of it. The other necessitates coming into it, and 
discovering and applying the principles of mass production, 
which are the principles by which success is possible in the 
machine civilization. 

In both the old way and the new, it is well to remember, 
cooperation will be essential. In the one case, however, the 
cooperation will be limited to the members of a very small 
group, consisting of the farmer and his family. There must 
be a family. Individuals, surely, can not think of isolating 
themselves from the rest of humanity and achieving indi- 
vidual independence, letting the babies, if there are any, 
shift for themselves. The babies can not do that. The sick 
can not do it. The very old can not do it. There must be 


some sort of organization by which everybody will work 
first in the interest of the whole group, or the race would 
come to an end. The real difference, then, between the old 
way of life and the new is in the size of the economic group. 
The old-fashioned group was very small and, even if every 
member worked hard and there was the finest cooperative 
spirit, only a bare living could be achieved. Mass production 
constantly widens the group, and seeks to include everybody, 
not because of unselfishness but because selling to everybody, 
and seeing to it that everybody is amply able to buy, is so 
much more profitable than any other way of doing business. 

Today, absurdly, agriculture is faced with the problem 
of overproduction, which proves, at any rate, that the farm- 
ers have abandoned the old way of life. Independent little 
groups would never have such a problem, for even if they 
raised more than all the members could eat, no one would 
think of worrying about it. The only thing that worried 
them was their having less than they wanted. It is not neces- 
sary to suggest, then, that farmers should abandon the old 
way of life, but only that they must abandon the old way 
of thinking. 

American farmers, for instance, have been producing mil- 
lions of bushels of wheat and millions of bales of cotton 
more than they could sell, and have been compelled to 
offer them for sale at less than the cost of production. They 
have appealed to the government to guarantee a profitable 
sale for all this produce, and the government has, at times, 
sunk millions of dollars into buying farm products which it 
did not want and could not sell without driving the price 
still lower and leaving the farmers still more desperate than 

In the meantime, desperate efforts were made to organize 
"cooperative marketing," partly with the intent of doing 
away with a needlessly expensive system of middlemen, but 


chiefly for the purpose of securing for the farmers a higher 
price than they were able to get through unrestrained com- 
petition. All these movements were understandable, for it 
was obvious that farmers could not go on indefinitely selling 
their product below the cost of production, but none of them 
found or could find a solution. The solution is too simple. 
It consists of operating, in an industrial world, upon indus- 
trial principles, and in a world of mass production upon 
the principles of mass production. 

If the automobile industry had found itself producing 
more cars than it could dispose of above the cost of produc- 
tion, we can not imagine the Government's buying millions 
of cars, which it did not need and could not sell, so that the 
industry might go on producing still more millions of cars 
and thus keep all its employees "profitably" employed. Un- 
employment, to be sure, could not solve any problem, as the 
mass production industries must inevitably find out; but 
neither can continuous employment in the production of 
things which can not be profitably sold. 

Mass production, however, does not try to limit produc- 
tion to the market. Above all, it does not attempt to peg 
prices. If it can not sell profitably at the prevailing price, 
it lowers the price, achieves a wider market and finds out 
how to sell profitably at this lower price. It can do this only 
by conquering wastes in production and distribution; and 
when everything possible is done to simplify the flow of 
goods from producer to consumer, the price becomes so low 
and the market so wide that, instead of unemployment, it is 
necessary to employ more people than before. 

Only when farming is organized to fill the needs of con- 
sumers at the lowest possible price with which they can be 
filled can farming succeed in a mass production world. That, 
of course, will entail large-scale production. It will necessi- 
tate looking upon farming as an industry, instead of a mere 


homestead where whoever happens to belong to the family 
may join with the others in scratching a living from the soil. 
It must be governed" by fact-finding, instead of by tradition, 
and must adopt not merely modern machinery but modern, 
scientific management in production, distribution and 
finance. It must not merely adopt modern formulas, but 
must adopt the technique of improving constantly upon 
these formulas, never being content to continue doing 
things in the way they have been done. 

Modern industry, moreover, can not confine itself to the 
manufacture of one specific commodity when the market 
for that commodity has been destroyed or rendered un- 
profitable by any cause, or when such production is neces- 
sarily seasonal in character and competitors have found a 
way to supply the market as a mere side line of some con- 
tinuous, profitable, year-round business organization. 

No worker could be successful, surely, if his only occupa- 
tion consisted of shovelling snow. Conceivably, he might be 
an excellent snow shoveller, but he would find himself out- 
distanced at the end of the fiscal year by those who had 
kept fairly busy at other occupations during the weeks and 
months when snow shovellers were not in demand. Such a 
man, in fact, could not afford to shovel snow at any wages 
which a snow shoveller could hope to get; for such wages 
surely would not be enough to keep him through the year, 
and he would be forced to apply either to the government or 
to private charity for snow shoveller's relief. 

But how about wheat growers? No modern business or- 
ganization, surely, can hope to confine itself to wheat grow- 
ing, and still hope to sell its wheat very profitably. The 
enterprise requires considerable capital and, in harvest time, 
a considerable force of employees. But it is seasonal. The 
capital, equipment and labor involved can be concentrated 
upon the job of wheat growing for but a few weeks during 


the whole year; and even in good years, one is taking a 
desperate chance if he hopes to make an annual profit from 
these few weeks of maximum activity. 

Obviously this is an industrial problem and requires an 
industrial solution. Years ago the majority of our industries 
were seasonal; and so long as they were competing with 
similarly seasonal industries, they managed to get along. 
Those were the days, however, of low wages, small profits 
and a low standard of living generally. When some employers 
discovered how to stabilize their organizations, how to regu- 
larize employment, how to develop by-products and how to 
keep their factories running full-head throughout the year, 
would-be competitors who did not adopt such methods soon 
found themselves hopelessly outdistanced and unable to 
realize any returns upon the capital which they had in- 

Many services, it must be kept in mind, are necessarily 
seasonal. One can not run a summer resort in winter. If the 
proprietor of a summer resort, however, can utilize his 
organization and capital in the running of some winter re- 
sort when his summer business has necessarily ceased, he 
has a distinct advantage over any competitor who is de- 
pendent upon a two-month season for a twelve-month in- 

The question is: Can agricultural work be stabilized so 
that producers of wheat (or any other crop) can not only 
produce these things in the most efficient and most economi- 
cal way, but so that the capital and the labor employed in 
their production can be employed with equal efficiency in 
the production of other things when they are not needed in 
the production of wheat? 

And the answer is, yes in these days of mass production. 
This is one of the most important, although one of the 
least understood, developments of modern times, and not 


only holds out enormous opportunities for American agri- 
culture but promises to play a conspicuous part in the build- 
ing of world peace and world prosperity. 

To bring up the price of wheat so that wheat growing 
under the old system might again become profitable is hope- 
less. There is no way by which the price of wheat can be 
advanced excepting through limiting the crop; and when- 
ever there is any sign of advancing prices, it is impossible to 
limit the crop. Even if America were the only wheat grow- 
ing country, limiting the crop would still be extremely diffi- 
cult; but with Russia, the Argentine, Canada, the United 
States and other countries all growing wheat and all eager 
to export great surpluses, the only way in which the crop 
could be limited is through prices becoming so low as to 
discourage wheat growers entirely. 

If profits can not be made out of low prices, then, they 
can not be made at all. But profits can be made out of low 
prices if wheat growing, instead of being a one-product, sea- 
sonal industry, can become the by-product of successful, 
well-organized, year-round, industrial enterprise. And this 
can happen. In some small degree, in fact, it is already hap- 
pening. Modern industry, because of the development of 
electric instead of steam power, is decentralizing. It is no 
longer necessary for great employers to gather all their em- 
ployees under one roof or in one particular spot. Various 
parts and various materials of one industrial product may 
now be manufactured in small branch factories throughout 
the country, wherever conditions are favorable for such 
manufacturing; and it is already being discovered that con- 
ditions are favorable for such manufacturing, or that they 
can easily be made favorable, in distinctly agricultural com- 

The great deterrent to such development heretofore was 
the difficulty of maintaining regular year-round employment 


in the small industrial branches located in the rural sections; 
but by the coordination of agriculture and industry, regu- 
larization is now becoming possible. Farms and industries 
need not necessarily be under the same management, but 
they must plan their operations with reference to each other. 
The bulk of the indoor factory work will necessarily be 
done in winter, while the bulk of the outdoor farm work 
is necessarily done in summer. The farms, moreover, will 
tend to supply the industries with all products which can 
be grown most advantageously in the vicinity; and the in- 
dustries, through their research departments, will seek to 
find new uses for everything which the farms are able to 
produce, or for things which they have been producing but 
have customarily thrown away as worthless. 

Both farms and industries, then, can pay high wages, and 
will find it most profitable to pay the highest wages. But the 
farmer will not have to pay wages out of his own past sav- 
ings; he will be paying them, rather, out of the greater 
savings which these new methods and this new coordina- 
tion of industry and agriculture will be effecting. He may 
be a small farmer or a large, but he will not strive for an 
impossible independence from the world in which he is 
living, but for the fullest possible coordination with and 
the greatest possible service to that world. If his holdings 
are small, he will doubtless have to unite with other small 
holders, so that each may have the benefit of up-to-date 
machinery and large-scale, systematic planning, and so that 
the land held and the labor employed may be utilized to the 
utmost advantage. He will doubtless find it necessary to 
engage in cooperative marketing, not however for the pur- 
pose of raising prices to the impossible point where ineffi- 
ciency can be made to pay, but so that all may get the 
greatest total profits through giving the greatest possible 
service at the lowest possible price. 


When industry and agriculture effect such cooperation, 
the American farmer will not have to worry about the price 
of wheat. He may or he may not consider wheat worth 
growing, but it will be possible, at least, for him to sell 
wheat in the world market without facing bankruptcy. For 
wheat will not represent his total investment. He will be 
working profitably the whole year round, either in some 
form of agriculture which is profitable, or in some well-paid 
industrial occupation. He will not grow wheat, then, be- 
cause that is all there is for him to do; and if there is 
general overproduction, he will not add to it and stake his 
very existence upon the result. The greater part of his year, 
at least, will have been spent in making money; and any 
wheat which he may have produced in addition may be 
sold for anything which the market offers and he will have 
that much more money anyway. 

When it is discovered, however, that industrial countries 
can produce wheat or other crops at lower prices than agri- 
cultural countries can, the agricultural countries will have 
to do something about it. The inevitable result must be to 
force industrialism upon these other nations, if for no other 
reason than to avert the inevitable social upheavals which 
would follow from inability to sell their agricultural sur- 

The immediate result, of course, would be to curtail pro- 
duction for the world market in those countries which could 
not sell their surpluses, which would tend to raise the price 
in the world market once more. But a far more beneficial 
result, both to America and to the whole world, would come 
from the development of machine industry and mass pro- 
duction methods in the agricultural countries, and the 
consequent raising of their standard of living toward the 
American level. 

World progress, world prosperity and world peace itself 


depend upon more buying, as more effective methods of in- 
dustry make more production possible. That is, upon a 
higher and ever higher standard of living for the masses, 
both industrial and agricultural workers, everywhere. The 
old way of life the way by which little groups could till the 
soil for their own immediate keep could and did go on 
for ages; and while it was always desirable, it was never 
necessary that the masses who lived by such methods should 
rise above the line of abject poverty. But that old way of 
life is not only undesirable but impossible now. Mass pro- 
duction methods, but by adopting them to compel their 
which not only can but must give ever greater service to 
everybody. It is not only necessary, then, to adopt mass pro- 
duction methods, but by adopting them, to compel their 
adoption generally. 

The business problem, the farm problem, the world prob- 
lem are all one problem, and they can be solved only by 
facing the facts of success in this machine age, instead of 
following the formulas and traditions of another day. The 
solution of the farm problem after all is simple; it is our 
inability or our unwillingness to state the problem squarely 
which makes the solution seem so difficult. 


WHEN mass production brought the automobile to 
the masses, it answered an age-old longing of the 
human sould to conquer its environment and break from the 
historic limitations of time and space. It also brought the 
traffic problem, and it endowed fools and criminals with 
hitherto unheard-of power. The motor car, in fact, proved 
too much for even the intelligent and the decent to use 
intelligently and decently; and at the height of automobile 
achievement in America, we found ourselves killing upwards 
of thirty thousand persons yearly in automobile "accidents," 
while the list of minor casualties read like that of a major 

Some thoughtful persons pondered the situation only to 
conclude that the motor car, with all its advantages, was not 
worth such a cost. The slower and simpler ways, they said, 
were better. But fortunately or unfortunately, this had no 
effect upon the situation. After one had reached such a con- 
clusion, in fact, he was likely to turn in his old car for a 
faster and more powerful model. 

The fact is that we can't abolish the motor car. It is here 
because we learned how to bring it here, and it is a lesson 
which we can not unlearn. We have eaten of the fruit of the 
tree of knowledge, and it has done something to us which 
can not be undone. We now have power which we can not 
abdicate. We must learn to use this power, either to our own 
advantage or our own destruction. 

What is true of the automobile is true of machine produc- 
tion as a whole. New machine technique applied to old 
patterns of thought is capable of destroying all human civi- 



lization in war. Machinery is our servant and it is ready to 
do whatever we want it to do. We want world peace, for 
instance, and mass production is showing us how to achieve 
world peace. If we insist on thinking traditionally, however, 
we may find ourselves engaged, not in mass production but 
in mass destruction. 

Mass production can, if we insist, equip us all with aero- 
planes and poison gas. If these aeroplanes are made so safe 
that even a child can run one, they may become so dangerous 
that the race can not survive. True, if we employ mass pro- 
duction understandingly, we shall have no more war; for 
mass production, employed understandingly, makes friends, 
not enemies, and it is impossible to have war without 
enemies. But mass production, like the automobile, will not 
wait for us to become educated. It will keep on showing us 
how to do things more efficiently; and if, because of our tra- 
ditional thinking, we do evil things, the result may be a 
greater total of evil than we would have reaped if our 
methods had not been so efficient. 

We never meant to kill thirty thousand Americans an- 
nually with our motor cars. We did it largely because we 
did not see the necessity for making our highways safe for 
pedestrians as well as motorists; and, although we saw its 
obvious advantages, we thought it would be a very costly 
thing to do. That is, we did not understand mass production. 
Had we understood it, we would have known that it adds to 
our wealth to do things which we want to have done; and 
that, if we have enough man-power and enough scientific 
management to spare for such jobs, we can not afford not 
to do them. 

Safe highways are worth more than highways which are 
too narrow for cars to pass other cars in safety, or highways 
upon which pedestrians have to walk because they are not 
provided with adequate paths. To be sure, it might have 


required billions of dollars of capital to build such highways 
and such paths for pedestrians everywhere. But we had the 
billions of dollars which were either uninvested, or invested 
in the making of things which the people generally did not 
want nearly as much as they wanted to know that their chil- 
dren, when they were out of the house, were safe from motor 

But this surplus capital was not employed in making our 
highways safe, nor in any other enterprise which would have 
added similarly to the common wealth. Millions of able- 
bodied, willing workers, therefore, and thousands of capable 
engineers and scientific managers were left unemployed. Our 
highways, therefore, remained unsafe, and we went on kill- 
ing thousands and injuring hundreds of thousands. In the 
meantime, assuming that a workingman under scientific 
management creates ten dollars worth of wealth a day, 
America lost fifteen billion dollars' worth of wealth in a 
single year, that is, wealth which its five million unemployed 
should have been producing but were not permitted to 

Even that does not wholly tell the loss which we sustained 
because, in our traditional thinking, we did not use mass 
production understandingly. Because these men were unem- 
ployed, they could not buy the things they had customarily 
been buying; and millions who were customarily employed 
in the making of those things were reduced, at best, to part 
time employment, and other billions of dollars were added 
to our loss. 

Mass production, we must admit, brings its peculiar evils, 
for no such widespread unemployment would have been 
possible before the industrial era. The cure, to be sure, does 
not lie in abolishing mass production. If it did, the situation 
would be hopeless, for mass production can not be abolished. 
Nevertheless, we must recognize the intolerable situation. 


Mass production, it seems, has placed great reservoirs of 
capital under the control of persons who do not yet know 
enough to use it for the production of more wealth, but 
actually permit widespread unemployment, with its billions 
of dollars of losses annually. 

No patriarch in the old days could possibly have fallen 
into such an error. If there was work which needed to be 
done, and men to do it, it would never have occurred to him 
that he could not afford to let them work. Of course, he 
knew nothing of finance. All he knew was how the different 
members of his little social order were related to each other. 
Many of our great modern capitalists, too often, although 
highly educated in the traditions of finance, are quite un- 
aware of the way in which the people of their social order 
are related. 

Leading American bankers, reviewing the long drawn out 
business depression in 1930-31, actually advocated a reduc- 
tion of wages and prices, it never seeming to occur to them 
that a reduction of wages is an automatic increase of prices. 
One might as well advocate more light and darkness, or call 
for a piece of string which shall be short at one end and long 
at the other. 

Others advocated "limiting production," which meant the 
laying off of more men, as a means of curing unemployment. 
The men who talked this way were not fools. They had 
reached their financial position through their very real abil- 
ity; and they were men whom business men had rightfully 
come to trust. For they understood the technique of financ- 
ing single industries as others did not understand it; and 
they had a wealth of information as to what business prac- 
tices had worked and what ones had failed. They were not 
even blind to Ford's success; they were called into counsel 
frequently by other mass production industries, and their 
knowledge was often extremely valuable. The writer would 


be the last to suggest that these men should be pulled down 
from their positions of responsibility and that men with 
better social theories but untrained in finance should take 
their place. Nevertheless, it must be listed among the real 
perils of this mass production age that so many men who do 
not know what money is for should be in charge of its 

Evolution, however, is more dependable than revolution. 
The automobile industry could not have succeeded as it did 
if it had started off by abolishing the horse. The aeroplane 
came, not entirely through the Wright Brothers, but through 
the patient research, year after year, of scientists who were 
not thinking about aviation at all. They were thinking of 
internal combustion, and of how to devise a motor which 
could be fuelled with gasoline. The men on that job may 
have considered flying a silly fancy and may not intention- 
ally have contributed a thing towards bringing it about. It 
was necessary to aviation, however, that they should build a 
light, high-power engine, which the Wright Brothers could 
apply to their particular aims. Similarly, it was necessary for 
mass production, if it was ever to liberate humanity, that 
financiers should first discover how to finance great projects, 
even though many of the projects seemed to be in the direc- 
tion of human slavery. 

It is a real peril of this mass production age, however, that 
many expert financiers should finance great and necessary 
enterprises, and then, through failure to understand the real 
purpose of these enterprises, almost wreck the enterprises 
themselves. A dozen large factories, say, under separate man- 
agement, are in competition, each trying to supply all 
America with practically the same service. Each company 
looks critically upon all the others, and each may be aware 
of how much better the country could be served if the whole 
twelve organizations could be brought under one unified 


control. They could then standardize their product and 
make free use of every improvement which any of the or- 
ganizations had discovered. They could also divide the terri- 
tory and save shipping costs and selling costs and, by unified 
buying of materials and supplies, effect still more economies. 
It is one thing to perceive the advantage of effecting a 
merger, however, and quite another to effect it; and the 
financial genius who succeeds in inducing these twelve or- 
ganizations to give up their independence and adopt a spe- 
cific program performs an incalculable service. 

Unfortunately, however, he may not consider it incalcul- 
able. He may consider it calculable and start to calculate. In 
ten years, he may calculate, the economies which such a 
merger may reasonably hope to effect may amount to so 
much as to justify him and his financial associates in taking 
a "rake-off" of, say, thirty million dollars. The several com- 
panies will not have to pay this, they think; it will all come 
out of the new stock issue, and this man is such a recognized 
and dependable leader in the financial world that the sale 
of the securities may almost be guaranteed. The chances, are, 
in fact, that they will be sold immediately, and the merger 
will be hailed as eminently successful. If each company could 
make a go of it in competition with all the others, the invest- 
ing public is easily persuaded that the twelve under one 
management can make barrels of money. 

With good luck, indeed, the merger may make money, and 
its profits may be greater than the total profits before. But it 
starts with a terrific handicap. The security buying public 
has just presented a financier and his associates with thirty 
million dollars, and looks to the merger to get it back with 
dividends, besides demanding that it pay dividends on the 
money which has been actually invested in the new enter- 
prise. The ten years' profits, therefore, are pretty well mort- 
gaged. Economies may be effected, but they can not be re- 


fleeted in a lower price just yet. It is even possible that the 
price of the improved product may now have to be raised, 
or that the old prices may have to be sustained without 
effecting any of the planned improvements. The result then 
is that mass production hasn't done any good after all. From 
the public's point of view, it may even have done harm. 
Better methods of production are adopted, but the price not 
being reduced, no more goods are sold and no greater pro- 
duction effected. Men, therefore, instead of getting higher 
wages and shorter hours for increased production, are simply 
let out to look for another job. 

This is a very real evil, for the illustration I have given 
is a commonplace of modern finance. The remedy, however, 
can not be found in prohibiting mergers. So long as there are 
profits to be had from combination, we may be sure that 
combinations will continue to form, whether they are always 
financed intelligently or not. 

Nor is the remedy to be found in "curbing" Wall Street 
and making mergers either more difficult or less profitable. 
The trouble with such mergers is that they aren't profitable 
enough. The loss to the public does not lie in the fact that a 
Wall Street merger has made thirty million dollars, but in 
the fact that it was not permitted to make it. Under the cir- 
cumstances it could not become a true mass production in- 
dustry. It could not reduce prices and, by thus perhaps 
doubling its market, double its usefulness to the public; and 
the public, being unable to buy more than before, could 
not provide the industry with a larger income than it was 
receiving before the combination was effected. 

Only out of its income, obviously, can any industry pay 
profits, and its income derives not from the sale of its secur- 
ities but from the sale of its product. Anything which pre- 
vents the greatest total sales of the product prevents greatest 
total profits. High prices, however, inevitably prevent sales. 


Intelligent financiering, therefore, like intelligent shop man- 
agement, will avoid any step which may tend to make prices 
higher than is absolutely necessary in order to have any 
margin of profit at all. 

Nor is it enough that prices be as low as they can be made 
by the use of existing methods. It is often necessary to make 
them lower than the current cost of production warrants, so 
that the management shall be compelled to reduce the costs 
of production. Not by cutting wages for lowering wages 
not only handicaps management but actually raises prices 
and, directly or indirectly, reduces sales but by a constant 
search for better methods both in production and distri- 

It is charged against Wall Street financiers that they are 
"greedy" and that they make too much money. If this were 
the real trouble, I can not think of anything that could be 
done about it. If financiers were not eager to make money, I 
should despair of our ever discovering the secrets of how 
money is really made. 

Even Henry Ford would not have achieved what he did 
if he had had any special aversion to becoming rich. He 
learned in time, to be sure, and probably always knew, that 
just being rich is not a worthwhile human objective, and 
that one might as well aim at just being fat. Nevertheless, he 
went in for profits as avidly as any Wall Street promoter, 
and he made more money than any of them. Instead of feel- 
ing aggrieved at his success, however, the public generally 
rejoiced. There was no clamor for laws to curb him. People 
even made the mistake for years of supposing that he must 
be a most unselfish soul, utterly unlike the rest of us a 
sort of glorified Santa Glaus. 

The real trouble with Wall Street is not its greed or its 
selfishness, not even the ruthlessness and the cruelty with 
which some of its transactions are carried through. Those 


who do the most harm in Wall Street are likely to be the 
most sentimental and kind-hearted folks, so easily moved to 
tears at the sight of poverty and misfortune that they have to 
hire secretaries and other assistants to keep the poor and 
unfortunate out of their sight. Moreover, they are likely to 
be the best of husbands and fathers, and charming and 
charitable neighbors in the communities in which they live. 
The only trouble with them is their shortsightedness and 
their traditional thinking especially the fact that they still 
suppose that the greatest profits can be made by methods 
which prevent industries from giving the greatest possible 
service to the greatest number of people. 

Greed, perhaps, may be defined as shortsighted selfishness, 
and with that definition we may agree that the real trouble 
is greed. But it is the shortsightedness, not the selfishness, 
which needs to be eliminated; and the remedy can not be 
found in curbing Wall Street, for the simple reason that 
shortsightedness can not be curbed. 

Conceivably we might curb the selfishness, leaving the 
shortsightedness, but nothing could be gained from that. 
Even if we could perform some feat of magic and turn this 
selfishness into unselfishness, the result would be horrible. I, 
at least, can imagine nothing worse than a community of 
shortsighted altruists, no one with any intelligent notion of 
what to do, but each impelled nevertheless to meddle with 
everybody else's affairs. 

If the public were wise enough to legislate for Wall Street, 
and could be depended upon not to interfere with financial 
operations which would work to the public interest, that 
might be the way out. But the public is not wise enough. 
The way of the greatest advantage to the public happens to 
be the way of more profits, not less, and the public fancies 
that the financiers are getting too much. Until the financiers 
do learn their lesson, it seems to me that we must take note 


of their shortsightedness as one of the very real dangers of 
this new machine civilization, and wait as patiently as pos- 
sible until the lesson can be learned. Fortunately this does 
not necessitate waiting forever. For the principles of mass 
production are being learned, even in Wall Street. The most 
successful chain stores are those in which no element of bad 
financing has intruded to keep them from giving first atten- 
tion to the production and distribution of goods at the lowest 
possible price. 

This is true, even of the "power interests," which have 
been most under criticism in the matter of financial methods. 
A seemingly irreconcilable war, in fact, developed between 
shortsighted financiers of the power industry, bent upon 
burdening the industry financially so that financiers' profits 
would be increased but rates could not be lowered, and 
equally shortsighted champions of the people who de- 
manded that the industry be put under political administra- 
tion so that no one would make a profit out of it, and 
electricity, presumably, might be generated and distributed 
at cost. 

Both sides to this controversy were wrong, and it was for- 
tunate for the American public that neither side achieved 
its goal. Both sides believed that high rates did work out to 
the advantage of the owners. Had both sides known that 
high rates were as bad for the owners as they were for the 
consuming public, the controversy could not have happened. 
Had that fact been known by the power industry, it would 
even have avoided overcapitalization; and had it been 
known by the agitators, they would have ceased arguing 
about "fair" and "unfair" rates and would have cooperated 
with the power interests in every scheme to make the rates 
as low, and therefore as profitable, as they could be made. As 
it was, with all the mistakes of overcapitalization, the power 
interests did go in for the discovery of better and more eco- 


nomical methods of production and distribution. When bet- 
ter generators were invented, they scrapped the old ones 
immediately, regardless of the capital that was tied up in 
them; and with the discovery of inter-connecting transmis- 
sion systems, they scrapped costly but obsolescent properties 
once more. This conceivably might be done by a political 
government which found itself in possession of great power 
plants. But the power interests had to do it, and it is more 
than likely that political governments would conclude that 
it could not be done. Even if it were a good government and 
did not run the service in terms of the jobs which it could 
give out in return for political support, it could hardly help 
remembering that it was selling power at cost, and it would 
not be forced to find new ways of bringing down the cost. 

In the matter of financing, the power interests were piti- 
fully shortsighted. In the manner of engineering, their vision 
was superb. Driven by lust for profit, they floated issue after 
issue of securities based upon faith, hope and optimism; but 
driven by lust for profit, they also built up a super-power 
system throughout America in a single decade which a non- 
profit administration of the industry would hardly have 
arrived at in a hundred years. 

Such an achievement does not justify the financial extrava- 
gance with which it was accompanied. If the financiers had 
had their way entirely, it is almost certain that they could 
not have accomplished what they did. For they made it plain 
generally by their deeds if not by their words that they be- 
lieved in high rates, and were constantly complaining be- 
cause they were not permitted to make them higher. If they 
had been let alone, then, to make their rates as high as they 
hoped to make them, there is every reason to believe that 
they would have made them so high as to cut themselves off 
from much of the profit which actually came to them. 

The power industry, it may be said, was saved by its oppo- 


sition. Rates were kept down, at least, to a figure which made 
profits possible, in spite of all that the shortsighted financiers 
of the industry itself could do to prevent it. And in the end, 
some power companies began to see that low rates might be 
more profitable than high. When that lesson is thoroughly 
learned, the power interests may remain quite as "greedy" as 
ever; but their greed will be the public's strongest ally, for 
all the power and all the cunning which once went into the 
war against the common good will then be directed, not 
toward making rates merely "fair," but toward making them 
as low as boundless energy guided by scientific research can 
make them. 

In the meantime, until mass production becomes thor- 
oughly aware of itself, there is a very real danger to. our 
industrial order in the mobilization of some of the forces 
which are working most earnestly for the common good. The 
fight for public ownership and control of public utilities, 
for instance, contains no little menace; not at all because 
public utilities should not be publicly controlled but be- 
cause of an almost universal misunderstanding as to 
how public control in a mass production age is actually 

The advocates of public control, fired by a very genuine 
social passion, advocate government control political gov- 
ernment control of industry, even while they are observing, 
at times, that the public does not control the political gov- 
ernment. Their opponents, on the other hand, instead of 
explaining the situation (which they can not explain because 
they do not understand it) argue loudly for "private" con- 
trol, as though the management of industry were something 
about which the public had no say. 

As a matter of fact, so-called "private" industry is fre- 
quently much more public than the political government 
itself, and much more definitely under public control. Ford 


and General Motors, for instance, are private only in name, 
and the fact that the Fords own all the stock in one, while 
the ownership of the other may be spread throughout the 
country makes no difference whatever. Let either company 
fail to respond to the public's wishes, and the public would 
discipline it at once. It wouldn't wait to pass a law; it 
wouldn't have to wait, as it would have to if an elected gov- 
ernment were in charge. All it would do, and all it would 
have to do, would be to cease buying the thing which, upon 
actual test, failed to give complete satisfaction, and such a 
gesture must be accepted instantly as an absolute command 
from which the company can not appeal. 

It is possible to bring every industry under just such con- 
trol, but this can not be done by any political election, nor 
by any wholesale declaration of opinion on the part of those 
who do not know the facts. It can be done only through fact- 
finding, both on the part of industrial executives and of con- 
sumers. This may seem like a slow process, but it is not. 
When we stop to think of how fact-finding has changed the 
whole world in a single generation, and of how slowly the 
world changed when it was necessary to change it by politics 
and propaganda instead, even our impatience must lead us 
to adopt the fact-finding method. 

The great peril of this mass production age lies in the 
power which fact-finding places in our hands before we have 
discovered how to use that power wisely. Futile optimism 
may ignore this real danger, and futile pessimism may con- 
clude that it necessarily spells our undoing. The wise will do 
neither, but will try in all humility to find out how the 
power may be used. It is not enough, even, that we all "do as 
well as we know how." The new situation needs new knowl- 
edge, and neither the old-time education nor the old-time 
morality is sufficient for these new responsibilities. They were 
not sufficient in the past to keep us out of war, but the time 


has now come when there must be no more war. They have 
not been sufficient of late to keep us out of unemployment, 
but the time has now come when civilization must conquer 
unemployment, or unemployment will conquer civilization. 


ANEW world has come into existence. We did not plan 
it, but we must plan how to live in it; and the plan 
to be successful, must be in harmony with the laws of our 
being and the laws under which this new world happened. 

From time immemorial, man has longed for a better 
world. Sometimes, he has engaged in trying to fashion one 
out of his ideals. A world of justice. A world of brotherly 
love. A world free from care and suffering and poverty and 
cruelty and hate. But human nature seemed to be perverse. 
Never, it seemed, would it react dependably to any of these 
beautiful plans. Idealists, then, from age to age, have turned 
their thoughts to changing human nature. 

But human nature, apparently, remained what it was. 

The world man lived in, however, did not remain what it 
was. That was forever changing; not changing necessarily, 
however, in the direction of man's ideals, but forever hit- 
ting upon times when man's most sacred notions seemed to 
lose their force, and the elders shook their heads and won- 
dered what the world was coming to. In the course of time, 
new ideals were born, new notions, and new plans for en- 
tirely new worlds, which, however, failed to materialize. New 
social orders came, to be sure, but they did not come accord- 
ing to the plans. The only human plans which ever seemed 
to work were the plans, not for changing either human 
nature or human society, but for coping with the changes 
which had taken place. 

People did not say: "Let us quit our old patriarchal way of 
doing things and set up political states." No. They began to 
trade, rather; and when the practice of trading brought prob- 



lems which the patriarchal system could not solve, they were 
compelled to work out some other form of government. 

Rome did not conquer the world so that she might give it 
a code of law. Rome conquered the world because, in a day 
of conquest, she was the most successful conqueror; but hav- 
ing conquered it, she had to govern it, and was therefore 
compelled to work out a code of law. 

In the days of feudalism, no one said: "Go to, now, let us 
invent machinery and establish capitalism." The steam en- 
gine was invented because somebody noticed what steam 
could do, if it were held back by a piston and the piston rod 
were attached to something which one wanted to push. When 
there were enough steam engines, however, to render the old 
way of pushing things relatively inefficient, plans had to be 
made to facilitate the use of this new method. That is why it 
was necessary to overthrow feudalism. 

In America, moreover, we did not plan a constitution and 
notify England that her rule was over. It was because Eng- 
land's rule was over that the fathers planned the Constitu- 
tion. They had to. There had been a war and the colonies 
had won. The war did not begin, moreover, with the Decla- 
ration of Independence. It began with Lord North's failure 
to understand the colonies and with his failure, therefore, to 
govern them. The war had gone on some time before inde- 
pendence was planned. 

Even the strange social experiment in Soviet Russia was 
not the result of social planning on the part of Lenin and 
Trotzky before the revolution put them into power. Russia 
has given us the most extraordinary example of social plan- 
ning in human history, but the plans which have so amazed 
the world were made after the revolution, not before. Lenin's 
original plans were all wrong, all unworkable; but Lenin 
himself discovered this before his enemies did, and was not 
compelled therefore to give up his leadership. 


His plans for seizing power were sound enough; but they 
had nothing to do with his belief in communism. He could 
have seized power quite as effectively if his economic theories 
had been very different. Government in Russia had broken 
down, and almost any leader who knew what to do could 
become the government. Lenin got the army to obey him by 
giving it the only orders which, under the circumstances, it 
was capable of obeying orders to quit carrying on a war 
which such an army could not carry on. There were but a 
handful of communists in that army. It was composed mostly 
of peasants whose social ideals were as far from communism 
as those of the Czar himself. The one thing they consciously 
longed for was the private ownership of a bit of land which 
each peasant could henceforth till in the old traditional way, 
without having to share the product with anyone outside 
his family. There was a loyal response, therefore, when the 
new government ordered these soldiers to go home and 
possess the land. 

It is one thing to seize power, however, and quite another 
thing to hold it. It was now evident to almost all traditional 
thinkers that the new government could not last. It had 
almost no capital and no borrowing power, very little 
industrial equipment and much less industrial technique. 
It was in the hands, at any rate for the time being, of a 
group of visionaries, possessed of impossible economic 
theories and no political experience, whose actions had 
already enraged all of Russia's former allies, and alienated 
about everybody within her borders who was supposed to be 
anybody at all. 

There was just one thing that could be said for this new 
government, and that was usually overlooked. Under Lenin's 
leadership, it recognized the predicament which it was in. It 
did not follow the traditions of government. It not only 
scrapped the theories of capitalism, but it scrapped the 


theories of communism too. It faced the facts and began to 
work out a plan. 

It made all sorts of mistakes. No government on earth, it 
seemed, could have made any worse. But when it made a 
mistake, and the mistake proved disastrous, it did not in- 
corporate that mistake into the organization, after the 
manner of traditional thinkers. Under the most adverse cir- 
cumstances imaginable, then, this new government held on, 
and Bolshevism became a world power which, in the minds 
of many thinking capitalists, actually challenges capitalism. 

Many books have been written and many speeches made 
concerning the way in which capitalism should meet this 
challenge. Some insist that Bolshevism must be snuffed out. 
Others suggest that capitalism must take up social planning 
so that social revolution may be averted. My own attitude is 
that business must undertake social planning, but neither for 
the purpose of snuffing out new theories nor of preserving 
old ones, but because there has been a social revolution. The 
old order has gone and by no possibility can we bring it 
back. We are living in a new world. It is a world in which 
mass production has related everybody to everybody; and 
our plans, therefore, must take everybody into consideration. 

I am not moralizing. I am not idealizing. I am not sug- 
gesting that business men must rise above temptations, or 
that they should give more heed to the rights of humanity. 
I am suggesting simply that they can not be successful in this 
new world by planning their business with reference to a 
world that has passed away. They need not bother with the 
rights of humanity, but they must bother with its buying 
power. They may have any ideas they wish as to what people 
ought to be, but if they are to do any business, they must do 
it with people as they are. 

There has been a greater and more inclusive social revo- 
lution in America than has yet taken place in Russia. That 


may seem like a startling statement, but anyone who exam 
ines the facts must see that it is true. There has been a 
greater change in the standard of living. The masses of 
Russia, with all their new theories, are still desperately poor. 
They have made amazing advances in the building of indus- 
trial equipment, but it remains to be seen whether they can 
operate it successfully. They have automobile factories, but 
the masses have not yet got automobiles. They have co- 
operative farms, but food is still very hard to get. Even with 
unemployment abolished, the masses as yet have no luxuries 
and are compelled to live in quarters which American 
workers as a rule would consider utterly unfit for human 

I do not mean this as an indictment of the Russian experi- 
ment. I am simply stating facts with which the Soviet lead- 
ers themselves are well acquainted and which they are doing 
their best to impress upon the Russian people. The one 
thing that must be done, they are constantly pointing out, 
is to master industrial technique as it has been mastered in 
America's mass production industries. 

After all, it is this new technique which actually changes 
human life. It is this which raises the standard of living. It is 
this which makes it possible for workers to ride in luxurious 
motor cars which, but a few years ago, were looked upon as 
we look today upon private yachts as the exclusive in- 
dulgences of society's upper crust. It is this technique which 
multiplies the productivity of labor so that not merely the 
necessities of life, but an increasing volume of comforts and 
luxuries are possible for all, combined with an increasing 
leisure which enables the masses to rise above the mere 
struggle for existence and turn more of their attention to 
education and to social and spiritual culture. 

This technique is nothing which Americans have to learn. 
Americans understand it. They have made it work; not, to 


be sure, to the degree to which they might make it work, 
but enough to produce mass prosperity on a scale which no 
masses in human history ever enjoyed before, and in many 
ways beyond the dreams of the old Utopian socialists. 

This is the technique of mass production. It is so success- 
ful that, when we are employing it, it almost automatically 
solves problems which have hitherto been considered in- 
soluble. The wage problem, for instance. That used to be 
something for employers and employees to fight about; but 
with employers perceiving that business success hinges upon 
their making wages as high as possible, no such fight can pos- 
sibly take place. Similarly, the problem of the consumer's 
getting his money's worth. Mass production consists in the 
consumer's getting his money's worth, and of seeing to it also 
that there are more and more consumers. To be successful, it 
must take everybody into consideration. 

Mass production, then, must engage in social planning. 

All business has had to plan; but when the masses had 
almost no buying power, business men planned their busi- 
ness with reference to the market as it was. If the market was 
good, they increased production. If the market went wrong, 
they shut down. This made the market worse, but they didn't 
know that, and there seemed to be nothing that they could 
do about it anyway. Business had not yet become the way in 
which the masses got their living. It was the way merely in 
which business men got their living; they took chances with 
the market, and the market was supposed to be beyond any- 
body's control. Each business was a private matter. Social 
planning, if undertaken at all, must then have been under- 
taken by some social agency, particularly by the political 

With the coming of scientific management, however, busi- 
ness had to do some different planning. Frederic Taylor and 
the other engineers who followed him pointed out the neces- 


sity of synchronizing the various departments of a factory so 
that each department, instead of merely making a record for 
itself, should work with reference to every other department. 
They called this planning "industrial coordination." It was, 
however, only a beginning. It increased production, and low- 
ered production costs; but it was soon discovered that this 
was not particularly profitable unless more goods were sold. 
So business undertook to plan sales, instead of merely pro- 
ducing goods according to market demands. 

The first sales plans, however, were not all that had been 
hoped for them. By adding to the sales force, by putting 
more dominant and more high-salaried experts in charge 
in a word, by "high-pressure salesmanship" it was soon 
found that sales could be expanded to meet the increased 
production. But the process was not always profitable; for 
while the cost of production might be lower than ever, the 
cost of production and distribution might be higher than 

Such plans were not social plans, for they did not take 
society into consideration. They did not result immediately 
in mass production; for, while they sought to sell to the 
masses, they did not give the masses more than the masses 
might have got without all this new high-power manage- 
ment. Another way was eventually found, however, to in- 
crease sales and profits too. That was to lower the price and 
thus to obtain more sales per unit of sales force. This was 
highly successful, and because it was successful, business 
could never be the same again. 

Successful business then, whether it realized what it was 
doing or not, did engage in social planning. It was not likely 
to be called that. It was more likely to be called by the old 
term industrial coordination. But its production program 
was organized with reference to its sales program, and its 


sales program was organized, not with reference to the mar- 
ket as it was, but with reference to the market which could 
be achieved providing the price were made so low that 
greater and greater numbers of people would gladly buy. 

This was real service to society. By considering first the 
consumer's dollar, and trying to give the consumer the 
greatest values which scientific methods made it possible to 
give, business became a social force, more responsible to the 
needs of the masses than any other social agency, even the 
political government itself, could possibly be. 

That is, some business. Successful business. Traditionally 
minded business men did not notice what had taken place, 
and even those who went in most truly for mass production 
often failed to note the extent of the social change which 
these new methods brought about. They still spoke of their 
industries as "private." They may even have lauded "indi- 
vidualism" and have resented all movements which they be- 
lieved to be "socialistic." Actually, however, this new method 
of business knit human society together more closely and 
more vitally than political organization of any sort could 
possibly have done. And it brought social problems which 
only further social planning on the part of business could 

This book has been an effort to indicate the extent of this 
social change. It has not advocated any particular social 
order, and not ridden any dreams of an ideal state. It has 
tried rather to discover what human relations have become 
by virtue of the change which has taken place, and to show 
the necessity of dealing with them as they are, not according 
to theories of what society might be, nor according to the 
fact of what it was but is no longer. 

Business is the government of this modern world. It may 
refuse for a while to function as such. It may refuse to accept 


its social responsibilities, and may continue to look to Wash- 
ington or to God to do the things which only social plan- 
ning on the part of business management can do. 

Business can serve the masses. It can employ the masses 
and, if it understands the nature of the new social set-up, it 
can sell to the masses all that it employs the masses to create. 

One business, working independently, can not do this. 
Twenty-five per cent of business organized in mass produc- 
tion may even fail to erase the unemployment which the 
other seventy-five per cent creates. But wide-awake and deter- 
mined business leadership may state the problem clearly; 
and by a wider application of the technique which has 
proven so abundantly successful, may inaugurate inter- 
industrial coordination as successfully as any factory has 
been able to coordinate its various departments. This will 
not be a revolution. It will be a mere recognition, rather, of 
the revolution which has taken place. 

There is no further need for poverty, no further neces- 
sity for unemployment; and it is not necessary, even, for us 
to learn a new industrial technique. All that is necessary is 
an application of the technique which we have learned. That 
is the technique of mass production. It is the technique of 
Successful Living in the Machine Age the age in which 
the prosperity of each of us depends so vitally upon the 
prosperity of all.